THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

RIVERSIDE 


I! 


SOCIAL   REFORM 


SOCIAL    REFORM 

AS    RELATED    TO    REALITIES    AND 
DELUSIONS 


BY   W.   H.    MALLOCK 

AUTHOR   OF    "A   CRITICAL   EXAMINATION    OF   SOCIALISM,"    ETC. 


NEW    YORK 

E.   P.   BUTTON    &   COMPANY 
1915 


Sherratt  and  Hughes,  Printers,  London  and  Manchester. 


u 
X 

IU 


PREFACE. 


THIS  work,  which  deals  with  "  social  reform *  as 
connected  mainly  with  the  production  and  distribu- 
tion of  material  wealth,  aims  at  exposing  certain 
errors,  so  profound  as  to  be  fundamental,  which  form 
the  primary  assumption  of  "  reformers  "  of  the  more 
extreme  type,  with  regard  to  both  these  questions ; 
and  to  assist  sober-minded  politicians  and  others,  in 
unmasking  these  errors,  and  combating  the  proposals 
based  on  them. 

For  this  purpose  use  has  been  made,  for  the  first 
time,  of  specific  official  information,  the  existence  of 
which  appears  to  have  been  overlooked,  relating  to 
the  amount  and  distribution  of  incomes  at  the  begin- 
ning of  the  nineteenth  century.  McCulloch  believed 
that  the  records  here  in  question  had  been  destroyed. 
At  the  same  time  he  regarded  them  as  so  essential  to 
a  true  understanding  of  conditions  at  that  time,  that  he 
compared  their  supposed  destruction  to  the  loss  caused 
by  the  burning  of  the  Great  Alexandrian  Library. 
They  are  not  quoted  by  Porter,  Levi,  Dudley  Baxter, 
or  Giffen,  or  in  any  of  the  encyclopedias  published 
during  the  course  of  the  nineteenth  century.  Two 
copies  were  found  by  the  author  in  the  University 
Library  of  Cambridge.  They  enable  certain  broad 
comparisons  to  be  made,  which  would  otherwise  not 
be  possible,  between  present  conditions,  and  those  of 
more  than  a  hundred  years  ago. 

At  the  same  time  the  reader   must  be  reminded 


*i.  PREFACE 

that  in  respect,  both  of  the  period  just  mentioned,  and 
of  the  present,  the  figures  available,  though  substan- 
tially true  to  fact,  cannot  be  taken  as  possessing 
(except  in  a  few  cases)  mathematical  exactitude. 

It  is  specially  desirable  to  note  this  with  regard  to 
the  present  time.  In  the  first  place,  the  most  recent 
statistics  do  not  all  of  them  relate  to  the  same  year. 
The  latest  comprehensive  returns  with  regard  to  wage- 
rates  relate  to  the  years  1906  and  1907;  the  Census  of 
Production  relates  to  the  year  1907  ;  the  latest  census 
figures  (i.e.  Census  of  the  Population),  with  regard 
to  certain  particulars,  are,  at  the  present  moment, 
those  for  1901.  The  Reports  of  the  Income-Tax 
Commissioners  never  relate  to  the  actual  year  of 
issue.  Whilst  these  pages  were  in  the  press,  the 
Commissioners  issued  new  details,  by  which  to  a 
very  slight  degree  those  here  given  might  have  been 
modified. 

It  must  further  be  noted,  in  respect  of  the  total 
amounts  of  great  masses  of  income,  and  averages  of 
individual  incomes  within  certain  limits,  that  these 
are  affected  from  year  to  year  by  general  conditions 
of  trade,  and  increases  or  decreases  in  the  percentage 
of  unemployment.  Yet  again,  it  should  be  noted  that 
in  calculating  the  aggregate  income  of  the  wage- 
earning  classes  on  the  basis  (as  has  been  done  here) 
of  ascertainable  wage-rates,  and  also  of  the  total  in- 
come produced,  as  shown  by  the  Census  of  Production, 
the  sum  arrived  at  is  not  only  liable  to  deductions  on 
account  of  unemployment,  but  may  be  reasonably 
subject  to  addition  in  respect  of  public  moneys,  em- 
ployed for  the  benefit  of  that  class  alone — for  example, 
on  education,  and  payments  of  old-age  pensions  ; 
whilst  it  is  reasonably  contended  by  many  eminent 
statisticians  that  account  should  be  taken  of  the  value 
of  the  unpaid  domestic  services  of  .some  millions  of 
females,  who  perform  such  services,  but  do  not  work 
for  wages.  Were  these  last  included  in  the  aggregate 


PREFACE  *ii. 

income  of  the  wage-earners,   me  figures  here  given 
would  be  increased  by  about  6  per  cent. 

The  above  facts  being  considered,  it  may  be  said 
generally  of  the  figures  given  in  this  volume,  that  they 
possess,  from  one  point  of  view,  the  kind  of  accuracy 
obtainable  in  the  block  plans  of  an  architect,  or  a 
surveyor ;  and  that  they  possess,  from  another  point 
of  view,  both  the  accuracy  and  uncertainties  of  defini- 
tion, characteristic  of  a  non-instantaneous  photograph 
of  moving  objects.  Their  substantial  and  general 
truth,  however,  is  not  thereby  affected. 

January, 


CONTENTS. 

BOOK  I. 

CHAPTER  I. 

Estimates  of  Social  Conditions,  as  Distinct  from  Schemes 
and  Theories  of  Reform. — Causes  Conducive  to  the 
Popularisation  of  False  Estimates  3 

CHAPTER  II. 

The  Sense  of  Social  Grievance,  largely  Dependent  on 
Beliefs,  as  Distinct  from  Experience  -  -  8 

CHAPTER  III. 

Social  Grievances  in  the  Eighteenth  Century. — Their  Rela- 
tion to  Beliefs  in  a  Non-Historical  Past  13 

CHAPTER  IV. 

Social  Grievances  in  the  Nineteenth  Century. — Their  Rela- 
tion to  False  Versions  of  History,  which  are  now 
Exploded. — Two  Examples  :  Production  for  Exchange 
as  Contrasted  with  Production  for  Use. — The  Alleged 
Extermination  of  the  Middle  Classes  by  Capitalism  33 

BOOK  II. 

CHAPTER  1. 

The  General  Thesis  of  Social  Reformers  of  To-day. — 
Certain  Outstanding  Figures  by  which  its  Relation  to 
Truth  may  be  Tested. — Number  and  Grouping  of 
Incomes  exceeding  £60  a  Year,  in  the  Years  1801  and 
1910  49 

CHAPTER  II. 
A  Pictorial  Comparison   -       -       •       •       •       r       •    61 

CHAPTER  III. 

The  Aggregate  of  Incomes  exceeding  ^5,000  a  Year,  and 
the  proportion  borne  by  this  to  the  Income  of  the 
Nation  as  a  whole,  in  the  Years  1910  and  1801  -  75 

CHAPTER  IV. 

The  General  Causes  of  Misconception  with  regard  to  the 
Distribution  of  Wealth. — Delusion  due  to  the  Imagi- 
nation ------  90 


x-  CONTENTS 

CHAPTER  V. 

Imaginative  Delusions  as  to  the  Distribution  of  Wealth, 
fostered  by  the  Grotesque  Statistics  of  Agitators. — 
Statistics  of  the  Fabian  Society  Examined  by  way  of 
an  Example  -  -  98 

BOOK  III.          CHAPTER  I. 

A  General  Survey  of  the  National  Income,  and  its  Distri- 
bution into  Incomes  Exceeding  and  not  Exceeding 
;£i6o  a  Year. — The  two  main  Statistical  Misrepresenta- 
tions of  Agitators. — Grotesque  over-statements  of  the 
Total  subject  to  Income-tax. — Income  from  Abroad. — 
The  Total  Home-produced  Income  of  the  Country. — 
The  Average  per  Head  of  Home-produced  Incomes, 
respectively  Subject  and  not  Subject  to  Income-tax  113 
CHAPTER  II. 

Detailed  Examination  of  the  Total  Amount,  Number, 
Origin  and  Distribution  of  Incomes  not  Exceeding 

£160  a  Year -  131 

CHAPTER  III. 

Detailed  Examination  of  the  Income  of  the  "  Richer 
Classes,"  or  those  subject  to  Income-tax. — Total 

Amount  and  Sources 152 

CHAPTER  IV. 

Examination  of  the  Incomes  of  the  "  Richer  Classes," 
continued. — The  number  subject  to  Income-tax  as 
indicated  by  Enumerated  Assessments,  and  the  number 
of  Houses  above  certain  Values. — The  Grouping  of 
Assessed  Incomes  as  indicated  by  the  number  of 
Houses  of  various  Values. — Details  as  to  Distribution 
of  Incomes,  small  and  large,  Summarised  -  -  166 
BOOK  IV.  CHAPTER  I. 

The  Doctrine  of  Modern  Reformers,  that  Modern  Poverty 
is  mainly  due  to  the  inordinate  growth  of  Wealth. — 
Two  contradictory  versions  of  this  Doctrine — those 
of  Marx  and  George. — The  grotesque  futility  of 
both  versions  shown  by  the  Statistical  History  of  the 
United  Kingdom,  as  summarised  in  the  preceding 
Chapters 187 


CONTENTS  xi. 

CHAPTER  II. 

The  Effective  Increment  of  Wealth,  relatively  to  the 
Population  since  the  Year  1801. — Enormous  numerical 
Increase  of  Middle  Class  Workers.— The  Decrease  in 
relative  numbers,  and  enormous  Increase  in  Wages  of 
Manual  Labourers  -  -211 

CHAPTER  III. 

The  Fallacious  Assumptions  of  Reformers  as  applied  to 
particular  questions. — The  Question  of  Land-rent 
generally.— The  Question  of  "Unearned  Increment."— 
The  Agricultural  Question  -  -  -  232 

CHAPTER  IV. 

Current  Ideas  of  Reformers  as  to  Wages,  Hours,  and 
Profits. — Recent  Demands  with  regard  to  a  general 
Minimum  Wage. — The  Value  of  the  total  product  per 
head  of  Employees  in  different  Industries. — Smallness 
of  the  general  margin  of  Profits. — Particular  Examples. 
-Wild  Ideas  as  the  Ratio  of  Profits  to  Wages. — The 
way  to  Increase  Wages  generally  is  to  Increase  the 

Total  Product 252 

CHAPTER  V. 

The  Self-contradictions  in  which  Reformers  are  involved, 
owing  to  the  Fallacy  of  the  Assumptions  with  which 
they  start. — Land-rent,  Unearned  Increment,  Profits 
on  the  Use  of  Capital,  Profits  on  the  Men's  Invest- 
ments, and  simultaneously  alleged  Starvation  and 
rude  Health  of  Agricultural  Labourers  -  271 

CHAPTER  VI. 

Total  of  incomes  and  recipients. — Effect  of  Socialism  on 
income    from    abroad. — Specific    values. — Professional 
services.  —  Fancy     values.  —  Wages     and     savings. — 
Equalisation  of  incomes  not  practical  politics. — "Bet- 
ter distribution." — Analysis  of  incomes. — "  Transfer- 
ences."— Luxuries. — Effect  of  an  equal  division  -  281 
BOOK   V. 
CHAPTER  1. 

Social  Grievances,  as  due  to  facts  and  beliefs,  reconsidered. 
— Survey  of  Beliefs  in  Theories,  as  Distinct  from 


xii.  CONTENTS 

Beliefs  relating  to  concrete  Facts. — The  Influence  of 
Illusory  Theories,  commonly  called  "  Socialistic," 
mainly  due  to  False  Beliefs  as  to  Fact  -  -  -  3 15 

CHAPTER  II. 

Causes  of  the  Belief  that  an  increasing  proportion  of 
modern  Wealth  is  being  appropriated  by  one  small 
class,  reconsidered. — The  Influence  of  modern  Wealth 
as  a  spectacle. — The  lighter  and  graver  sides  of  the 
Illusion  thus  produced. — The  Popularisation  of  imposs- 
ible Standards  and  Expectations. — Reasonable  Expec- 
tation limited  by  the  possibilities  of  Production. — 
Recent  recognition  of  this  fact  by  certain  Reformers — 
Their  Exaggerated  Interpretations  of  it  -  -  331 

CHAPTER  III. 

The  immediate  Possibilities  of  Increased  Production  con- 
sidered.— Allegations  by  certain  Reformers  as  to 
enormous  waste  by  Armaments,  by  competition  in 
Manufacture,  and  especially  by  needless  Advertise- 
ment.— Extravagance  of  these  Estimates  shown  by 
detailed  Facts. — Varying  but  gradual  Increase  of 
National  Income  during  different  periods. — Contem- 
poraneous Increase  in  Income  of  Working  Classes. — 
The  latter  impossible  without  the  former. — Demon- 
stration of  the  closeness  of  their  connection. — Fallacy 
of  the  Idea  that  sudden  and  sensational  Increases  cau 
be  achieved  in  either. — "Unrest"  as  the  result  of  false 
expectations --  342 

CHAPTER  IV. 

Welfare  and  Income. — How  the  effective  value  of  earnings 
is  increased  by  general  improvement  of  the  conditions 
under  which  they  are  earned  and  spent  ...  560 

CHAPTER  V. 

Conservatism  and  the  Rights  of  Property. — Limitation  of 
such  Rights  an  Essential  Condition  of  their  Existence. 
— Similar  Limitations  of  a  man's  property  rights  in 
his  own  labour  power  --„...-  ^75 


BOOK    I. 
INTRODUCTORY. 

ON  THE  WIDE  ACCEPTANCE,  IN  THE  PAST,  OF 
ERRORS  NOW  REPUDIATED,  AS  TO  SOCIAL 
CONDITIONS  AND  TENDENCIES. 


CHAPTER    I. 

THE  phrase,  "  Social  Reform,"  is  employed 
in  the  present  volume  in  the  more  or  less 
specialised  sense  with  which  recent  use  has 
invested  it.  It  is  employed  to  indicate  Reform 
as  understood  by  those  who  regard  the  principal 
evils  which  exist  under  contemporary  condi- 
tions, not  as  sores  or  bruises  which  are  local 
or  accidental  in  their  nature,  but  as  results  of 
some  organic  defect  in  the  structure  of  society 
as  a  whole,  and  as  curable  only  by  some 
similarly  organic  change. 

Social  Reform  in  this  sense  presents  to  those 
who  would  examine  the  subject  two  questions 
or  sets  of  questions,  each  of  which  must  be 
considered  separately  : — one  consisting  of  theo- 
ries as  to  social  action  in  general,  together  with 
practical  schemes  which  have  such  theories  as 
their  basis ;  the  other  consisting  of  the  estimates, 
made  and  popularised  by  reformers,  of  those 
conditions  and  tendencies  as  they  actually  are 
to-day  which  are  held  by  such  persons  to  render 
their  schemes  necessary. 

The  latter  of  these  two  questions  will  here 
be  considered  first,  such  an  arrangement  being 
that  which  logic  and  common  sense  dictate. 
If  an  architect  is  to  restore  successfully  a 
cathedral  which  threatens  to  collapse,  he  must 
not  only  be  a  master  of  the  principles  of 
construction  generally,  he  must  also  be  a  master 


4  INTRODUCTORY  [Book   1 

of  the  details  of:  this  particular  fabric — the 
nature  <>f..its  .foundations,  the  thickness  of  its 
walls' "ahti- pillars,'  a-nd  the  'cause  and  extent  of 
each  crack  or  subsidence.  It  is  only  in  propor- 
tion to  the  accuracy  of  his  knowledge  of  these 
particulars  that  his  principles  and  plans  will  be 
applicable  to  the  practical  vvork  in  view.  In 
the  same  way  the  schemes  of  social  reformers, 
though  dependent  in  part  on  general  ideas  and 
principles,  can  only  come  to  possess  a  practical 
meaning  in  proportion  as  they  are  determined 
by  a  knowledge  similarly  accurate  of  the  actual 
conditions  of  the  society  for  the  benefit  of  which 
they  are  advocated. 

Now  the  peculiar  danger  to  which  social 
reformers  are  liable  is  a  neglect  of  this  obvious 
truth.  Belonging,  as  they  mostly  do,  to  a 
supersensitive  class,  for  whom  sympathy  has 
the  powers  and  the  limitations  of  an  indefinitely 
magnifying  lens,  they — or,  at  all  events,  the 
most  honest  of  them — are  affected  by  the 
spectacle  of  suffering  more  acutely  than  they 
would  be  by  the  experience  of  it;  and  the  vivid 
pictures  which  the  spectacle  leaves  in  their 
minds,  and  which  in  heightened  colours  they 
reproduce  for  the  public,  are  apt  to  be  symbols 
of  the  distress  which  they  feel  themselves, 
rather  than  diagrams  of  complicated  conditions 
which  are  causing  distress  to  others. 

In  this  fact  we  have  the  main,  though  by  no 
means  the  sole,  origin  of  a  mass  of  mischievous 
delusions,  by  which  popular  opinion  at  the 
present  day  is  vitiated,  to  an  extent  and  in  a 


Chap.  I.]  EXISTENCE  OF  EVILS  5 

manner  not  perhaps  sufficiently  realised.  These 
supersensitive  persons,  largely  as  a  consequence 
of  their  honesty,  are  abnormally  impatient  of 
criticism;  and  anyone  by  whom  their  own 
estimates  of  social  evils  are  questioned  is 
attacked  by  them  as  though  he  were  maintain- 
ing that  no  evils  exist,  and  that  everything  is 
for  the  best  in  this  best  of  all  possible  worlds. 
Now  to  anyone  who  reflects  calmly  it  is  obvious 
that  in  actual  life  judgements  relating  to  a 
multitude  of  obscure  details  are  never  thus 
reducible  to  a  choice  between  two  extreme  and 
mutually  exclusive  alternatives.  To  deride 
the  statement  that  a  sick  man  is  dying  of 
Asiatic  cholera  is  not  to  affirm  that  he  is  in 
absolutely  rude  health.  To  deny  that  four- 
fifths  of  the  population  of  a  country  are  starv- 
ing is  not  to  assert  that  no  section  of  it  is 
familiar  with  undeserved  want.  The  real 
question  at  issue  between  the  extreme  reformers 
and  their  critics  is  not  whether  any  evils  of  a 
grave  kind  exist,  but  what,  given  their  existence, 
is  their  precise  extent  and  character;  and  to 
argue  that  anyone  who  accuses  the  extremists 
of  over-estimating  them  is  necessarily  denying 
their  existence,  or  is  even  insensible  of  their 
importance,  is  to  argue  like  an  angry  child. 
Childish,  however,  as  this  type  of  argument  is, 
if  considered  as  an  appeal  to  reason,  it  consti- 
tutes nevertheless  a  powerful  appeal  to  the 
feelings,  not  only  of  the  sufferers  on  whose 
behalf  it  is  ostensibly  used,  but  also  of  others 
whose  position  is  of  a  totally  different  character. 


6  INTRODUCTORY  [Book  I. 

Human  tempers  and  temperaments  being 
such  as  they  are,  the  over-estimates  of  social 
evils  put  forward  by  extremists  do  no  doubt 
tend  to  provoke,  by  way  of  reaction,  an  under- 
estimate of  them  on  the  part  of  the  opposing 
moderates.  While  such  a  mood  lasts,  the 
moderates  lay  themselves  open,  as  the  recent 
history  of  Conservativism  in  this  country  shows, 
to  a  charge  of  neglecting  matters  which  multi- 
tudes regard  as  vital.  Popular  support  is  more 
or  less  widely  withdrawn  from  them;  and  in 
process  of  time  the  results  of  a  general  election 
rouse  them  to  an  alarmed  perception  that  such 
is  actually  the  case.  This  again  leads  presently 
to  a  reaction  of  another  kind.  In  order  to  free 
themselves  from  the  suspicion  of  being  indif- 
ferent to  social  evils,  the  moderates  in  nervous 
haste  betake  themselves  to  an  opposite  extreme. 
They  compete  with  one  another  in  proclaiming 
their  full  recognition  of  the  facts  of  the  social 
situation  precisely  as  their  opponents  give  them ; 
and  confine  themselves  to  declaring  that,  these 
terrible  facts  being  true,  it  is  they,  and  not  their 
opponents,  who  best  know  how  to  deal  with 
them.  In  this  way,  so  far  as  mere  facts  are 
concerned,  the  inflammatory  picture  drawn  of 
them  by  politicians  of  the  most  extreme  type 
secures  the  endorsement  of  those  who  are 
otherwise  their  professed  antagonists,  and 
imposes  itself  on  public  belief  like  a  legend 
replacing  history. 

How  wide  the  difference  is  between  facts  as 
they  actually  are  and  popular  conception  of 


Chap.  I.]  PREVALENT  ERRORS  7 

them  which  is  generated  in  the  manner  just 
described,  it  will  be  the  object  of  the  earlier 
portion  of  the  present  work  to  elucidate.  Since 
many  persons,  however,  will  no  doubt  be 
reluctant  to  believe  that  errors  so  great  as  those 
which  are  here  suggested  can  possibly  exist  in 
a  picture  of  contemporary  conditions,  which, 
even  if  it  was  outlined  originally  by  persons 
prone  to  exaggeration,  is  accepted  by  so  many 
others  of  naturally  sober  judgement,  attention 
will  be  called,  before  we  proceed  farther,  to 
causes  which  render  such  errors  at  all  events 
antecedently  probable,  and  also  to  examples 
of  their  prevalence  and  the  subsequent  exposure 
of  them  in  the  past. 


CHAPTER    II. 

WHAT,  then,  when  we  talk  about  social  evils  as 
estimated    by    persons    who    regard    them    as 
subjects  of  reform,  are  the  evils  which  we  have 
in  view?     It  is  obvious  that  they  are  sufferings, 
or  conditions  which  produce  suffering ;  but  they 
are   sufferings  of   a  definite  and   limited  kind 
only.     In  brief  phrase  we  may  say  of   them 
that  they  are  grievances  as  distinct  from  griefs. 
If  a  bridegroom  loses  his  bride  because  she  is 
killed  by  an  avalanche,  his  loss  is  a  grief,  but 
nobody  would  call  it  a  grievance.     If  he  loses 
his  hat-box  through  neglect  on  the  part  of  a 
porter,  his  loss  is  a  grievance,  but  nobody  would 
call   it   a   grief.      Between   the   two   kinds   of 
suffering  the  radical  difference  is  this — that  the 
one   is   attributable   to   causes   beyond   human 
control,  while  the  other  is  attributable  to  the 
needless  misbehaviour  of  man.      There  is  no 
remedy  for  the  one.     There  is  presumably  a 
remedy  for  the  other.     If  the  grievance  is  the 
grievance  of  an  individual,  the  natural  remedy 
is  a  law-suit.     If  it  is  the  corporate  grievance 
of  a  class,   the  natural  remedy  is  legislation. 
It  is  plain  that  the  concern  of  the  reformer  is 
with  class  grievances  only;  but  these  resemble 
those    of    the    individual    in    one    respect    so 
important  that  the  former  will  be  best  under- 
stood by  comparing  them  with  the  latter. 
Both,  then,  resolve  themselves  into  broadly 
8 


Chap.  II. J  COMPARATIVE  VALUE  9 

contrasted  groups,  according  as  they  are  mainly 
due  to  the  direct  impact  of  facts,  or  to  the 
influence  of  facts  as  presented,  correctly  or 
incorrectly,  to  the  imagination.  Thus  if  a  man 
is  wretched  because  his  means  are  rarely 
sufficient  to  admit  of  his  pacifying  the  normal 
demands  of  hunger,  his  grievance  arises  from 
facts  pure  and  simple.  The  imagination  has 
nothing  at  all  to  do  with  it.  On  the  other  hand 
a  man  may  have  an  income  of  ^2,000  a  year, 
and  may  have  regarded  himself  for  half  his 
life-time  as  a  favoured  son  of  fortune;  and  yet 
if  one  day  a  lawyer  persuades  him  that  he  is 
the  rightful  heir  to  a  peerage,  of  which,  with  the 
estates  attached  to  it,  he  is  defrauded  by  some 
distant  kinsman,  what  has  up  to  that  time 
seemed  riches  to  him  will  assume  the  charac- 
teristics of  poverty;  and  he  may  well  be  more 
aggrieved  by  the  thought  that  he  is  not  dining 
off  silver  than  he  would  be  by  the  difficulty  of 
getting  any  dinner  at  all.  Facts  are  involved 
in  this  latter  case  just  as  they  are  in  the  former; 
but  they  are  only  turned  into  a  grievance  by 
the  way  in  which  the  imagination  works  on  them. 
Similarly  if  a  multitude  of  wage-earners  find 
that,  through  a  fall  in  wages,  so  much  butter 
and  bacon  disappears  from  their  tables,  the 
sense  of  grievance  which  arises  is  due  to  direct 
experience.  The  butter  and  bacon  disappear 
not  in  imagination  but  in  fact.  On  the  other 
hand  the  same  men  may  be  aware  that  their 
wages  have  risen.  They  may  daily  be  reminded 
of  the  fact  by  an  ampler  and  more  appetising 


io  BELIEFS  AND  [Book  I. 

diet;  and  yet  they  may  be  conscious  of  a 
grievance  even  more  acute  because  their  leaders 
have  led  them  to  imagine,  correctly  or  incor- 
rectly, that  the  rise  ought  to  have  been  greater, 
and  that  the  masters  could  afford  to  make  it  so. 
Between  the  grievances  of  classes,  however, 
and  those  peculiar  to  individuals,  there  is  one 
important  difference.  The  part  which  the 
imagination  plays  in  producing  the  former  is 
incomparably  greater  than  that  which  is  played 
by  it  in  producing  the  latter.  Let  us  take  the 
case  of  the  man  who,  possessed  of  an  ample 
income,  suddenly  feels  himself  poor,  because 
he  has  been  led  to  imagine  that  legally  he  has 
a  claim  to  millions.  The  facts  which  the 
imagination  of  such  a  man  must  present  to  him 
in  order  to  produce  such  a  change  in  his  mental 
state  as  this,  are  bound  to  comprise  many 
outside  his  personal  knowledge.  They  will 
relate  to  questions  of  marriages  valid  or  other- 
wise, the  dates  of  births  and  deaths,  and  other 
similar  matters,  which  have  rested  forgotten  or 
unquestioned  for  it  may  be  several  generations, 
and  which  can  only  be  got  together  by  means  of 
expert  research.  But  such  facts,  however 
obscure  and  numerous,  are  nothing  in  compari- 
son with  the  facts  which  the  imagination  is 
called  on  to  assimilate  when  the  claimant  to  be 
inoculated  with  a  grievance  is  not  an  individual, 
but  a  class.  Not  only  do  the  facts  here 
involved  comprise  the  innumerable  details 
which  constitute,  as  inter-related,  the  social 
conditions  of  to-day  :  they  comprise  social 


Chap.  II.]  HISTORICAL   FACTS  li 

conditions  as  they  were  at  previous  periods — a 
century  or  perhaps  a  century  and  a  half  ago,  or 
in  the  Middle  Ages,  or  even  before  the  dawn 
of  history,  with  which  conditions  present  con- 
ditions are  contrasted.  For  example,  the 
discontent  which  expressed  itself  in  the  French 
Revolution  owed  much  of  its  character  to  the 
pictures  drawn  by  Rousseau  of  the  many 
amenities  forfeited  by  our  primeval  ancestors 
when  they  made  the  fatal  mistake  of  submitting 
themselves  to  social  laws. 

Now  facts  such  as  these  being  inaccessible 
to  ordinary  enquiry  or  observation,  they  must, 
in  so  far  as  the  ordinary  public  is  to  be  moved 
by  them,  be  got  together  by  reformers  who, 
posing  as  sociological  specialists,  summarise 
and  group  them  so  as  to  form  a  coherent 
picture,  in  which,  as  in  "  a  mirror  held  up  to 
nature  "  the  public  is  invited  to  contemplate  its 
own  condition,  comparing  what  is  with  what 
was,  and  also  with  what  should  and  may  be; 
and  the  public  must  necessarily  take  the 
accuracy  of  the  picture  on  trust. 

Such  being  the  case,  the  picture  may  be  true 
or  false.  There  is  no  reason  in  the  nature  of 
things  why  it  should  not  be  entirely  true.  All 
that  is  here  being  urged  at  the  present  moment 
is  this  :— that  in  proportion  as  the  facts  which 
the  picture  purports  to  represent  are  remote  in 
point  of  time,  or,  even  if  modern,  are  obscure, 
numerous  and  complex,  and  are  thus  beyond  the 
reach  of  direct  common  enquiry,  the  room  for 
error  in  any  picture  of  thr^m  which  is  presented 


12  EXISTENCE  OF  ERRORS  [Book  I. 

to  the  public  will  be  great;  that  it  will  not  be 
unnatural  if  the  gravest  errors  occur,  and  if, 
thus  escaping  exposure,  they  are  accepted  as 
indisputable  truths. 

In  the  two  following  chapters  some  pre- 
liminary examples  shall  be  given  of  errors  of 
this  kind — and  errors  on  the  largest  scale— 
which  have  been  promulgated  by  reformers  in 
the  past,  which  have  met  with  prolonged 
acceptance,  but  which  are  now  relegated  by  all 
to  the  limbo  of  pure  delusions. 


CHAPTER    III. 

MENTION  has  been  made  of  the  manner  in 
which,  in  the  eighteenth  century  Rousseau 
sought  to  stimulate  the  discontent  of  his  con- 
temporaries by  parading  before  them  a  picture 
of  the  almost  perfect  conditions  which  were 
enjoyed  by  the  human  race  in  the  earlier  stages 
of  its  existence.  Rousseau's  procedure  in  this 
respect  is  a  type  of  one  of  the  main  devices 
which  all  reformers  employ  for  a  like  purpose. 
Reduced  to  logical  terms,  it  presents  itself  as 
the  following  argument.  All  human  beings 
have,  as  an  historical  fact,  enjoyed  certain  equal 
advantages  at  some  specified  period.  What- 
ever advantages  it  is  possible  for  all  human 
beings  to  enjoy,  all  human  beings  have  a  right 
to  enjoy;  and  such  human  beings  as  do  not 
enjoy  them  now,  have  by  some  means  or  other 
been  robbed  of  their  just  inheritance.  Here, 
for  example,  is  a  statement  taken  from  an 
English  Liberal  journal  of  to-day :  '  The 
people  of  England  want  their  land  back  aeain; 
and  the  immediate  duty  of  the  Liberal  Party 
is  to  give  it  to  them."  This  is  not  explicitly  a 
statement  relating  to  English  history;  but,  if  it 
is  not  absolute  nonsense,  it  is  an  historical 
statement  by  implication.  It  must  mean  that 
there  was  a  time  when,  in  some  sense  or  other, 
the  land  of  England  was  the  property  of  the 

13 


14  SOCIAL   GRIEVANCES  [Book  l. 

great  mass  of  the  inhabitants  :  for  nobody  could 
want  a  thing  "  back  again "  if  he  had  not 
possessed  it  once.  The  value  of  this  particular 
statement  does  not  concern  us  here.  It  is 
merely  quoted  as  illustrating  the  typical 
character  of  the  argument  drawn  by  Rousseau 
from  his  picture  of  a  remote  past. 

Expressed  more  definitely,  Rousseau's  own 
contention  was  this.  If  we  examine  the  life 
of  man  in  the  primary  state  of  nature,  we  find 
it  to  have  been,  in  many  important  respects, 
superior  to  that  of  most  Frenchmen  towards 
the  close  of  the  eighteenth  century.  Nobody 
was  comfortable,  it  is  true;  but  this  was  a 
blessing  in  disguise,  for  nobody  was  conscious 
of  discomfort.  The  primeval  human  being, 
however,  was  a  solitary  cave-dwelling  animal, 
the  males  and  the  females  meeting  only  for 
purposes  of  reproduction ;  and  though  the 
males,  like  Rousseau  himself,  were  not  embar- 
rassed by  any  subsequent  thought  of  their 
offspring,  the  habit  of  reflection  was  not 
sufficiently  developed  to  render  these  hermits 
conscious  of  such  beatitude  as  was  theirs.  In 
order  to  acquire  such  consciousness,  some 
intercourse  with  their  fellows  was  necessary. 
There  was  thus  room  for  improvement,  and  the 
requisite  improvements  came.  Caves  as  places 
of  residence  were  superseded  by  huts.  What 
now  would  be  called  "neighbourhoods,"  loosely 
compacted,  formed  themselves;  and  the  units, 
no  longer  solitary,  began  to  taste  the  pleasures 
which  society  alone  can  give.  They  looker 


Chap.  III.]       IN  THE  XVIII  CENTURY  15 

into  each  other's  eyes,  and  said  to  each  other 
'  We  all  are  extremely  happy."  But  such 
social  relations  were  wholly  free  and  spon- 
taneous. Although  there  was  sociability,  there 
was  no  social  authority.  A  man  might  perhaps 
be  the  owner  of  the  bed  of  leaves  he  slept  in; 
but  everything  out  of  doors  was  delightfully  free 
to  everybody.  There  was  no  such  thing  as  a  law 
which  enabled  any  human  being  to  say  even  of 
a  cabbage-plot  which  he  had  himself  cultivated 
:<  It  is  mine."  Here,  according  to  Rousseau, 
was  the  true  golden  age — a  secondary  State  of 
Nature,  which  was  a  kind  of  "  riper  first  "  :  and 
in  this  absence  of  government,  of  laws,  and  of 
protected  property,  which  are  purely  artificial 
creations,  lay  the  secret  of  its  lost  felicity. 

What  the  moral  of  all  this  was  for  the 
contemporaries  of  Rousseau  is  obvious.  Does 
anyone  surfer?  Is  anyone  poor  or  oppressed? 
The  cause  lies  not  in  the  fact  that  existing  laws 
are  unjust,  or  that  property  is  distributed  ill. 
The  cause  lies  in  the  fact  that  there  are  any 
laws  whatsoever,  or  that  anything  like  property 
exists  to  be  distributed  ill  or  well.  The  one 
reform  needed  is  not  to  reconstruct,  but  to 
destroy.  Let  us  destroy  the  artificial,  and 
history  shows  us  that  happiness  will  take  care 
of  itself. 

Let  us  now  turn  to  another  writer  belonging 
to  the  same  epoch,  who  is  no  less  famous  than 
Rousseau,  and  to  Englishmen  yet  more 
familiar— namely  the  poet,  Oliver  Goldsmith. 
Though  deficient  in  the  energies  essential  to 


ID  SOCIAL   GRIEVANCES  [Book  1. 

active  agitators,  there  was  in  Goldsmith  much 
of  their  characteristic  temperament.  In  the 
England  of  his  day  there  were  grievances  just 
as  there  were  in  France,  and  although  he  was 
blind  to  the  latter  he  brooded  over  the  former, 
and  endeavoured  to  render  his  own  countrymen 
conscious  of  them  by  means  precisely  similar  to 
those  employed  by  Rousseau  : — that  is  to  say, 
by  contrasting  contemporary  facts  as  he  saw 
them  with  a  picture  of  what  he  took  to  be  the 
facts  of  some  distant  and  happier  time. 
Embarrassed  by  poverty  himself,  he  was  a 
spectator  of  the  first  appreciably  rapid  multi- 
plication of  considerable  fortunes  in  England 
derived  not  from  agriculture,  but  from  trade. 
He  was  at  the  same  time  a  spectator  of  dis- 
placements of  the  agricultural  population 
which,  however  they  may  have  been  due  to 
improved  methods  of  farming,  were  tragedies 
for  those  displaced,  and  which,  as  he  under- 
stood them,  he  depicts  in  "  The  Deserted 
Village."  Divested  of  the  appeal  derived  by 
them  from  the  magic  of  his  unforgotten  verse, 
the  main  propositions  which  he  enunciates  are, 
in  plain  prose,  as  follows  : — 

"A  time  there  was  "  —that  is,  in  the  Middle 
Ages — when  England  was  a  country  without 
any  appreciable  "  grief,"  or  (in  other  words) 
appreciable  social  grievances.  The  bulk  of  the 
population  was  then  supported  by  agriculture, 
and  consisted  of  "  labouring  swains "  who, 
together  with  their  wives  and  children,  flour- 
ished in  "  health  and  plenty  "  on  their  ''  own 


Chap.  III.]      GOLDSMITH  AND  ROSSEAU  17 

roods  of  land,"  each  rood  on  an  average 
maintaining  one  member  of  a  peasant  family, 
and  so  secured  to  its  cultivators  that  it  could 
not  be  taken  away  from  them.  But  now,  says 
Goldsmith,  writing  in  the  year  1770,  English 
trade  had  increased  with  such  monstrous 
rapidity  that  it  was  drawing  the  swains  to  the 
towns  or  driving  them  into  foreign  exile;  the 
fields  and  the  villages,  denuded  far  and  wide 
of  their  population,  were  being  turned  by  trad- 
ing plutocrats  into  playgrounds  for  their  pride 
and  pleasure ;  whilst,  to  crown  everything, 
"  trade's  proud  empire "  itself  was  already 
nearing  its  zenith,  and  was,  unless  English 
virtue  should  somehow  manage  to  stop  it,  bound 
to  collapse  in  a  year  or  two,  buried  beneath  its 
own  ruins. 

Here  in  all  its  essentials  the  method  of 
Rousseau  is  reproduced.  We  have  contem- 
porary grievances  heightened,  indeed  to  a 
certain  extent  created,  by  contrasting  the  present 
with  what  purports  to  be  an  accurate  picture 
of  a  past,  when  the  place  of  every  existing 
imperfection  was  taken  by  its  enviable  opposite ; 
only  Goldsmith's  golden  age  was  less  remote 
than  Rousseau's,  and  the  moral  was  more 
precise  which  he  aimed  at  deducing  from  his 
picture  of  it. 

How  far,  then,  in  each  of  these  two  pictures, 
did  the  details  of  the  past  by  which  the  principal 
effect  was  obtained,  accord  with  actual  facts, 
and  thus  form  a  true  standard  by  which  the 
present  might  be  appraised  and  judged? 


i8  ROUSSEAU  [Book  I. 

With  regard  to  Rousseau  it  is  needless  to 
say  much.  Nobody  would  now  deny  that  his 
picture  of  the  Golden  Age,  if  considered  in  its 
relation  to  facts,  is  altogether  an  absurdity. 
The  actual  inhabitants  of  Europe  in  the  sub- 
primaeval  age  were  creatures  who,  if  Rousseau's 
contemporaries  could  have  seen  them  as  they 
really  were,  would  hardly  have  excited  the  envy 
of  the  poorest  peasant  who  ever  beat  the  frogs 
into  silence  for  the  benefit  of  the  seigneur's 
dreams.  The  condition  of  France  in  Rous- 
seau's day  may  have  been  as  bad  as  we  like  to 
think  it;  but  it  was  not  bad  because,  or  in  so  far 
as,  it  differed  from  the  condition  of  the  half-clad 
savages  who  were  the  subjects  of  Rousseau's 
fable. 

Goldsmith's  picture  of  the  past  has,  on  the 
other  hand,  certain  features  which  are  more  or 
less  historical;  but  his  drawing  of  these  is  so 
distorted,  and  their  meaning  is  so  changed  by 
the  complete  omission  of  others,  that  Rousseau 
himself  would  have  been  puzzled  to  make  the 
whole  more  fabulous,  had  he  tried.  In  the  first 
place,  though  it  is  true  that  in  mediaeval  Eng- 
land the  agricultural  workers  formed  a  larger 
fraction  of  the  population  than  they  did  in  the 
earlier  years  of  the  reign  of  George  III,  it  is 
totally  incorrect  to  suppose  that,  as  Goldsmith's 
picture  suggests,  the  entire  land  of  the  country 
was  devoted  to  the  support  of  peasants.  The 
"  swains,"  as  Goldsmith  calls  them,  occupied 
a  part  only,  and  paid  a  rent  for  their  annually 
allotted  strips  in  the  form  of  "  week-work  "  and 


Chap.  III.]  GOLDSMITH  19 

"  boon-work  "  on  the  domains  of  the  manorial 
lords.  Again,  though  it  is  true  that  each 
"  swain,"  villein  or  cottar  had  a  legal  right  to 
the  use  of  a  specified  number  of  acres,  and  that 
thus  his  means  of  subsistence  could  not  be  taken 
away  from  him,  this  fact  has  a  converse  side, 
no  less  important,  which  the  picture  of  Gold- 
smith altogether  omits.  The  mediaeval  swains 
could  not  be  driven  from  their  roods,  for  the 
simple  reason  that  they  were  not  permitted  to 
leave  them.  If  they  themselves  had  a  firm 
grip  on  their  lands,  their  lands  had  a  grip 
equally  firm  on  them;  and  this  arrangement, 
though  from  some  points  of  view  it  may  have 
been  a  blessing,  came  to  be  felt  by  many  of 
them  as  so  very  much  the  reverse  that  it  formed 
one  of  the  main  pretexts  for  the  great  Peasant 
Rebellion.  Finally,  as  to  the  number  of  the 
then  agricultural  population,  which,  according 
to  Goldsmith,  was  one  person  for  every  "  rood 
of  ground,"  it  is  enough  to  observe  that  if  this 
computation  were  correct  the  agricultural 
population  of  England  at  some  time  during  the 
Middle  Ages  must  have  been  greater  by  forty 
per  cent,  than  that  of  the  United  States  to-day. 
It  may  of  course  be  said  that  Goldsmith  wrote 
as  a  poet;  but  after  every  license  on  this  score 
has  been  accorded  to  him,  not  only  does  his 
picture  remain  a  picture  full  of  errors,  but  it  is 
the  errors  in  it  and  not  the  truths  which  pro- 
vided him  with  the  bases  on  which  he  reasoned 
from  past  to  present.  Even  if  he  had  meant 
that  the  number  of  the  mediaeval  agriculturists 


20  GOLDSMITH  [Book  I. 

was  only  one  to  an  acre  instead  of  one  to  a  rood, 
they  would  have  made  up  a.  total  of  very  nearly 
forty  millions;  and  to  anybody  who  started  with 
such  an  idea  as  this,  English  agriculture  in  the 
year  1770  (when  the  entire  population  of  the 
country  was  not  one-fifth  of  that  number)  would 
naturally  have  presented  itself  as  an  industry 
that  was  fast  dying,  and  the  English  fields 
would  have  seemed  to  be  already  almost 
deserts.  As  a  matter  of  fact  there  is  ample 
evidence  to  show  that  agriculturists  of  England 
at  the  time  when  Goldsmith  wrote  were  not  only 
more  numerous  than  they  had  ever  been  before, 
but  were  beginning  to  increase  at  a  rate  unex- 
ampled at  any  previous  period;  and  farther  that 
agriculture  as  an  industry,  instead  of  being 
injured  by  trade,  owed  to  the  growth  of  the 
trading  population  and  its  demands  that  series 
of  rapid  improvements  which  alone  enabled 
this  country,  in  the  course  of  another  genera- 
tion, to  confront  and  destroy  Napoleon.1 
Finally,  attention  may  be  called  to  Goldsmith's 
estimate  of  the  position  of  English  trade  itself, 
which,  according  to  him,  by  the  year  1770— 
when  measured  by  modern  standards  its  growth 

i.  According  to  Mc.Culloch  (see  Statistical  Accounts  of 
the  British  Empire,  chapter  on  English  Agriculture)  the 
English  production  of  wheat  was  about  3,840,000  quarters 
in  1765,  4,000,000  quarters  in  1773,  and  nearly  6,000,000 
quarters  about  twenty  years  later.  According  to  Arthur 
Young  (1802)  and  Marshall  (1790)  there  was  during  the 
latter  half  of  the  eighteenth  century  a  most  remarkable 
increase  in  the  number  of  small  farmers  and  free-holders. 


Chap.  III.]      NONSENSICAL  ESTIMATES  21 

was  only  just  beginning — had  all  but  reached 
the  limits  of  possible  or  even  thinkable  expan- 
sion, and  was  already  on  the  eve  of  bursting- 
such  was  obviously  his  idea — like  another  South 
Sea  Bubble  on  an  immeasurably  larger  scale. 
The  absurdity  of  this  estimate,  in  the  light 
of  subsequent  events,  is  perhaps  more  imme- 
diately evident,  but  it  is  hardly  greater,  than 
that  of  the  other  details  which  make  up,  if  not 
the  earliest,  yet  at  one  time  the  most  popular, 
picture  ever  presented  to  Englishmen  of  their 
own  social  grievances. 

No  social  reformer  would  maintain  to-day 
that  the  grievances  of  France  or  England  in  the 
eighteenth  century,  whatever  they  may  have 
really  been,  were  correctly  represented  in  such 
estimates  as  those  of  Rousseau  and  Goldsmith. 
What  is  here  commended  to  the  reader's  atten- 
tion is  that  the  fact  of  these  estimates  being 
nonsensical  was  no  bar  to  their  being  generally 
accepted,  and  that  the  fact  of  their  being 
generally  accepted  was  no  proof  that  they  were 
not  nonsensical.  It  may,  however,  be  said  that 
Rousseau  and  Goldsmith  lived  in  a  pre-scien- 
tific  age,  and  that  from  errors,  however  great, 
which  were  formulated  and  accepted  then,  no 
inference  can  be  drawn  as  to  the  state  of  affairs 
to-day.  This  is  no  doubt  true ;  and,  as  a  further 
introduction  to  our  examination  of  the  social 
estimates  current  at  the  present  time,  we  will 
glance  at  those  belonging  to  an  intermediate 
period,  during  which  the  apostles  of  Reform, 
like  other  thinkers  and  investigators,  adopted 


22  ROUSSEAU  AND  GOLDSMITH       [Boot  I. 

or  claimed  to  have  adopted,  the  methods  of 
advancing  science.  We  will  presently  take 
two  of  the  best  known  of  their  generalisations, 
and  see  whether  these,  in  point  of  scientific 
accuracy,  are  any  improvement  on  the  estimates 
of  Rousseau  and  of  Goldsmith,  or  no. 


CHAPTER    IV. 

THERE  is  one  feature  in  the  estimates  of 
Rousseau  and  Goldsmith  alike,  which,  unhis- 
torical  as  they  were,  invests  them  with  an 
historical  interest.  Both  alike  represent  some 
dawning  perception  of  that  movement  of  human 
affairs  which  is  now  called  Evolution,  and  the 
idea  of  which  is  so  deeply  implicated  in  modern 
theories  of  reform. 

Such  being  the  case,  let  us  now  turn  to  a 
thinker  who,  though  not  belonging  to  the 
company  of  social  reformers  himself,  has  been 
instrumental  in  furnishing  them  with  much  of 
the  present  mental  equipment.  In  the  year 
which  witnessed  the  publication  of  '  The 
Deserted  Village,"  there  was  born  in  Germany 
the  renowned  metaphysician,  Hegel.  Remote 
from  practical  life,  and  indeed  from  ordinary 
comprehension,  as  the  doctrines  are  to  which 
he  mainly  owes  his  fame,  he  condescended  to 
illustrate  their  validity  by  applying  them  to  an 
explanation  of  the  historical  development  of 
human  thought  on  the  one  hand,  and  of  human 
government  on  the  other.  The  development 
of  human  thought,  he  declared,  exhibits  itself 
as  an  historical  process,  under  the  guise  of  four 
"  Moments,"  each  representing  the  mentality  of 
some  particular  race  or  races  : — the  Orientals 
representing  childhood,  the  Greeks  youth,  the 
Romans  manhood,  and  the  Teutons  complete 

23 


34  HEGEL  AND  COMTE  [Book  I. 

maturity.  Of  this  same  process  another  and  a 
rival  account  was  subsequently  provided  by 
Comte,  the  French  prophet  of  Positivism.  For 
him  the  stages  of  the  process  were  not  four, 
but  three — the  Religious,  the  Metaphysical, 
and  the  Positive.  To  discuss  these  doctrines 
in  detail  would  be  nothing  to  our  present  pur- 
pose. It  will  be  enough  to  say  that  what  for 
Hegel  was  supreme  wisdom  was  for  Comte  the 
most  barren  folly;  that  Comte's  supreme 
wisdom  was  for  Hegel  the  most  vulgar 
ignorance;  that  the  one  doctrine  in  short  flatly 
contradicts  the  other;  and  that  nobody,  whether 
Comtist  or  Hegelian,  to-day  believes  in  either. 
They  are  only  mentioned  here  because  they 
lead  up  to  another — namely  Hegel's  doctrine 
of  the  evolution  of  human  government.  This 
is  likewise  resolved  by  him  into  a  sequence  of 
ordered  "  Moments,"  the  first  being  Despotism, 
or  government  by  the  will  of  one;  the  second 
being  aristocracy  or  democracy,  or  government 
by  the  will  of  a  more  or  less  numerous  many; 
the  third  being  government  by  a  constitutional 
Monarchy,  in  which  the  will  of  the  one  and  the 
will  of  the  many  are  unified.  So  far  as  practical 
opinion  at  the  present  day  is  concerned,  this 
theory  of  government  is  in  itself  no  less  sterile 
and  obsolete  than  its  companion  theory  of  the 
historical  evolution  of  thought;  but  it  was  the 
parent  of  another  whose  practical  consequences 
have  been  immense,  which  has  coloured  the 
ideas  of  reformers  for  now  nearly  half  a  cen- 


Chap.  IV.]  KARL  MARX  af 

tury,  and  which,  in  a  modified  form,  colours  and 
inflames  them  still. 

The  creed  or  the  group  of  creeds  now  known 
as  Socialism  first  came  into  being  and  acquired 
that  distinctive  name  early  in  the  nineteenth 
century.  But,  except  as  a  protest  against  the 
division,  which  was  at  that  time  daily  becoming 
more  apparent,  between  the  employers  of 
productive  labour  and  the  bodies  of  labourers 
employed  by  them,  Socialism  suffered  for  a 
very  considerable  period  from  the  want  of  any 
commonly  accepted  and  precise  theory  as  its 
basis  :  and  it  was  not  till  this  want  was  supplied 
by  certain  thinkers,  and  by  one  thinker  in 
particular,  that  it  grew  into  a  force  productive 
of  any  widespread  movements.  The  particular 
thinker  in  question — that  is  to  say  Karl  Marx — 
published  in  the  year  1865  his  celebrated 
treatise  on  Capital,  which  has  been  hailed  by 
socialists  all  over  the  world  as  a  work  which 
raised  Socialism  from  a  sentiment  to  an  exact 
science  ;  and  all  subsequent  reformers,  whether 
calling  themselves  socialists  or  no,  have  been 
influenced  by  certain  of  the  doctrines  to  which 
that  work  gave  currency. 

Marx  concerned  himself  at  once  with  theory 
and  with  concrete  facts;  and  he  deserves 
recognition,  whatever  may  have  been  his  errors 
otherwise,  as  the  first  thinker  who  attempted, 
in  any  systematic  way,  to  associate  the  details 
of  history  with  minute  economic  analysis.  The 
orthodox  economists,  such  for  example  as 
Rirardo,  were  content  to  accept  the  industrial 


26  KARL  MARX  [Book  I. 

conditions  of  their  day  as  though  masses  of 
wage-paid  labourers  working  for  great  em- 
ployers were  parts,  like  the  sun  and  moon,  of 
the  constant  order  of  nature.  Marx  insisted 
that  such  was  not  the  case,  that  the  system  of 
the  nineteenth  century  was  essentially  a  modern 
development,  and  that  it  could  only  be  under- 
stood by  a  study  of  the  other  systems  which  had 
preceded  it.  He  accordingly  aimed  at  pre- 
senting the  whole  series  as  a  sequence  of 
transitory,  and  radically  different,  states,  evolv- 
ing themselves  in  an  intelligible  order;  and  in 
this  attempt  he  was  guided  by  the  inspiration 
of  Hegel.  Just  as  Hegel  divided  the  history 
of  human  government  into  three  "  Moments"- 
Despotism,  Democracy,  Monarchy,  so  did 
Marx  divide  the  history  of  economic  production 
into  three  similar  "  Moments  " — Slavery,  Serf- 
dom, Capitalism,  the  third  of  which,  by  an 
Hegelian  unification  of  contraries,  was  doomed 
to  issue  in  a  fourth  and  final  "  Moment  "  which 
is  Socialism.  With  the  theories  of  Marx  we 
shall  have  occasion  to  deal  hereafter.  For  the 
moment  we  are  concerned  with  him  solely  as  an 
exponent  of  economic  history — with  the  definite 
statements  which  he  made  regarding  the  past, 
in  order  to  force  on  his  disciples,  by  contrast,  a 
specific  estimate  of  the  present.  Of  the  various 
propositions  which  he  enunciated  so  as  to  make 
this  contrast  complete,  and  exhibit  the  present 
system  of  capitalism  in  the  darkest  colours 
possible,  we  will  here  deal  with  two.  Both  of 
these  were  enunciated  by  him  with  the  utmost 


Chap.  IV.]         MARX    ON   PRODUCTION  27 

emphasis,  and  formulated  with  the  utmost 
elaboration;  they  have  been  vociferated  at 
socialist  congresses  all  over  the  world;  but 
neither  of  them  is  really  essential  to  the  position 
of  Marx  as  a  socialist.  They  can,  therefore, 
be  discussed  on  their  own  merits,  without 
affronting  or  flattering  any  controversial  pre- 
judice. 

One  of  them  relates  to  the  difference  between 
two  systems  of  production — production  for  use 
on  the  one  hand,  and  production  for  exchange 
on  the  other ;  and  is  to  the  effect  that  one  of  the 
cardinal  distinctions  between  the  modern 
capitalistic  system  and  the  systems  that  went 
before  it,  is  the  fact  that,  under  capitalism, 
production  is  production  for  exchange,  whereas 
under  the  preceding  systems  production  was 
production  for  use. 

The  other  relates  to  persons  of  moderate 
means,  who,  judged  by  a  financial  standard, 
constitute  the  middle  classes;  and  is  to  the 
effect  that  whereas,  until  modern  capitalism 
established  itself,  such  persons  formed  a 
numerous  and  important  section  of  the  com- 
munity, the  inevitable  tendency  of  capitalism 
is  steadily  to  reduce  their  number,  and  (as  Marx 
said,  writing  in  1865)  everything  goes  to  show 
that  they  will  presently  have  been  "  crushed 
out." 

The  difference  between  production  for  use 
and  production  for  exchange  is  simple,  and  is 
commonly  illustrated  by  a  contrast,  for  which 
there  is  some  historical  justification,  between  a 


28  PRODUCTION   FOR   EXCHANGE     [Book    I. 

plutocrat  of  the  ancient  world  and  a  capitalist 
manufacturer  of  to-day.1  The  former,  it  is 
said,  produced  through  the  labour  of  his  many 
hundreds  of  slaves  the  luxuries  which  he 
enjoyed  himself,  and  the  necessaries  which 
were  consumed  by  himself  and  his  slaves  also. 
The  modern  manufacturer,  on  the  other  hand, 
with  his  hundreds  of  wage-paid  workers,  pro- 
duces one  commodity,  or  class  of  commodity 
only,  such  (let  us  say)  as  jute  matting  or  screws, 
of  which  he  and  his  workmen  use  little  or 
nothing.  Hence  he  might  have  a  stock  of 
these  which  his  warehouse  could  hardly  hold, 
and  yet  be  as  poor  as  a  beggar  so  long  as  they 
were  in  his  own  possession.  They  only  become 
wealth,  available  as  profits  and  wages,  because 
of,  and  in  proportion  to  the  amount  of,  other 
commodities,  personally  usable  or  consumable, 
which  he  is  able  to  get  in  exchange  for  them. 

Is  it  true,  then — let  us  take  this  question 
first — that  production  for  exchange  is  peculiar 
to  modern  capitalism,  and  was  a  process 
unknown  or  negligible  under  the  systems  that 
went  before  it?  How  far  this  position  is  true 
and  how  far  it  is  fallacious, th  e  reader 
may  be  able  to  judge  from  the  following 
vignettes  drawn  by  contemporary  writers,  of 
economic  life  as  it  was  in  the  ancient  world. 

There  is  a  curious  Latin  novel,  "  The  Golden 
Ass  "  of  Apuleius,  exhibiting  the  conditions  of 
life  as  they  were  under  the  Antonine  Emperors, 

i.  Lassalle  drew  a  similar  contrast  between  the  modern 
capitalists  and  a  Greek  noble  in  the  Middle  Ages. 


Chap.  IV.]  "  THE  GOLDEN  ASS  "  29 

which  opens  with  an  account,  given  by  the  hero 
in  person,  of  the  close  of  a  journey  on  horseback 
to  a  certain  town  in  Thessaly.  His  long  route 
having  taken  him  through  scenery  of  all 
varieties,  he  finds  himself  at  last  in  a  green  and 
sequestered  by-way.  He  has  dismounted  to 
stretch  his  legs;  and  his  animal,  nosing  the 
grasses,  is  providing  itself  with  an  "  ambulatory 
meal,"  when  he  sees  a  little  in  front  of  him  the 
backs  of  two  other  travellers.  He  overtakes 
them,  makes  their  acquaintance,  and  discovers 
who  and  what  they  are.  They  are,  as  Dickens 
would  have  put  it,  two  "  commercial  gentlemen" 
—gentlemen  who  "  travelled  in  cheeses." 
Another  character  in  the  same  novel  is  a  miller, 
for  whom  the  unlucky  hero  is  temporarily 
compelled  to  work,  of  whom  and  of  whose 
business  he  gives  a  detailed  description.  The 
miller,  though  of  no  great  fortune,  is  evidently 
"a  warm  man,"  and  he  is  for  his  neighbours 
"  our  prominent  and  esteemed  fellow-citizen," 
as  they  presently  show  by  flocking  from  far  and 
near  to  his  funeral.  He  is  a  large  employer  of 
labour — unfortunately  of  a  "  low-grade  "  kind ; 
and  his  premises  shook,  so  the  writer  informs 
us,  with  the  ceaseless  grinding  of  one  mechanism 
after  another,  each  actuated  by  quadrupeds 
trotting  round  and  round  in  circles. 

Now  the  farmers  who  produced  the  cheeses 
"in  which  the  commercial  gentlemen  travelled," 
and  the  miller  who  produced  flour  on  the  scale 
that  has  been  just  described,  evidently  did  not 
produce  for  their  own  private  consumption. 


30  MOSCHION'S   .SHIP  [Book  I. 

They  produced  them  for  exchange.  Produc- 
tion for  exchange  was  their  occupation,  just  as 
it  is  the  occupation  of  the  typical  producers  of 
to-day. 

Let  us  take  a  few  other  illustrations,  which 
will  carry  us  still  further.  A  fragment  is  pre- 
served by  Athenaeus  of  a  Greek  writer, 
Moschion,  which  gives  an  account  of  a  ship 
built  for  goods  and  passenger  traffic  from  the 
designs  and  under  the  direction  of  Archimedes. 
This  resembled  in  many  respects  a  modern 
Atlantic  liner.  The  state-rooms  (three  beds  in 
each)  were  ornamented  with  inlaid  woodwork. 
There  was  a  roof-garden,  a  bath,  a  gymnasium, 
a  saloon  and  a  library.  The  ship  was  sheathed 
with  lead,  calked  with  pitch,  and  the  nails  were 
of  hard  bronze.  Of  the  materials  of  the  inlaid 
woodwork  a  portion  came  from  Africa,  the  lead 
probably  from  Sardinia,  the  cordage  (as  is 
specifically  stated)  from  Spain,  and  the  pitch 
from  the  neighbourhood  of  the  Rhone ;  whilst 
the  tin — an  essential  ingredient  of  the  bronze 
used  for  nails — came,  either  from  Spain,  or  (as 
is  more  likely)  from  Cornwall.  None  of  the 
producers  of  these  many  materials — cordage, 
pitch,  lead,  tin  and  so  forth — produced  them 
for  their  own  consumption.  They  produced 
them  for  exchange  only;  and  if  it  had  not  been 
for  the  practice  of  exchange,  such  materials 
could  never  have  been  produced  at  all.  How 
do  such  transactions  differ  from  those  thai 
prevail  to-day?  How  can  they  be  peculiar  to 
the  capitalism  of  the  modern  times  when  the 


Chap.  IV.]      FAMILY   MANUFACTURERS  31 

building  of  a  single  ship  two  thousand  years 
ago  involved  production  for  exchange  over  half 
of  the  then  known  world? 

It  may  be  said  that  the  doctrine  of  Marx  and 
of  those  who  follow  him  does  not  mean  that, 
before  the  capitalistic  epoch,  production  for 
exchange  was  altogether  unknown,  but  that  its 
extent  was  comparatively  small,  and  more 
especially  that  it  was  in  its  nature  an  incident, 
and  not  one  of  the  bases  of  the  economic  life 
of  nations.  Thus  one  of  the  shrewdest  of  the 
present  generation  of  reformers  has  urged  that 
the  normal  type  of  production,  as  opposed  to 
modern  capitalism,  is  the  production  of  all  the 
necessaries  of  existence  by  members  of  the 
consuming  family  or  small  cluster  of  families, 
the  commodities  obtained  by  exchange  from 
workers  other  than  themselves  being  trifling  in 
amount,  and  distinguished  by  being  "  non- 
essentials."  This  contention  to  a  certain  extent 
is  supported  by  well-known  facts.  There  are 
families  or  groups  of  families  which  have  from 
the  earliest  ages — and  many  of  them  survive 
still — grown  their  own  food,  woven  their  own 
clothing,  made  their  own  pots  and  pans  (as  was 
till  very  recently  done  in  the  Island  of  Tyree) 
and,  by  melting  fat  into  saucers,  provided  them- 
selves with  their  own  illuminants.  In  the 
eighteenth  century  large  country  houses  in 
England  manufactured  their  own  mould  can- 
dles. Great  Russian  households,  prior  to  the 
emancipation  of  the  serfs,  manufactured  their 
own  carpets,  and  many  articles  of  furniture. 


32  TRIMALCHIO  [Book  I. 

The  great  slave-households  of  the  magnates  of 
ancient  Rome  comprised  productive  workers  as 
well  as  personal  servants.  What,  then,  for 
purposes  of  comparison,  do  all  these  considera- 
tions come  to? 

In  this  connexion  we  may  turn  to  another 
Latin  novel — that  of  Petronius  Arbiter,  written 
in  the  days  of  Nero.  A  prominent  figure  in  it 
is  Trimalchio,  a  slave  who,  freed  by  his  master, 
had  managed  to  make  himself  the  richest  man 
of  his  period  :  and  a  considerable  portion  of  the 
book  is  devoted  to  an  account  of  a  banquet 
given  by  him  to  a  company  of  wondering  and 
half-derisive  guests.  The  arch-millionaire's 
conversation  (herein  not  wholly  unlike  that  of 
some  of  his  more  modern  counterparts)  turns 
principally  on  himself  and  his  own  possessions. 
One  of  the  casual  announcements  by  which  he 
makes  a  sensation  is  that  he  has  just  bought 
Sicily,  because,  he  says,  "  it  is  pleasant,  when 
one  goes  to  Africa,  to  be  sailing  as  far  as  may 
be  by  the  borders  of  one's  own  property."  His 
great  ambition  or  hobby,  however,  he  does  not 
mind  confessing,  is  to  have  every  single  thing 
which  he  himself  consumes  or  uses,  produced 
on  his  own  estates,  by  the  labour  of  his  own 
dependents,  and  be  able  to  say  with  truth  that 
he  buys  and  pays  for  nothing.  The  realisation 
of  this  ambition,  he  takes  care  to  insinuate, 
involves  the  possession  of  properties  all  over 
the  world,  and  he  admits  that  his  object  even 
yet  is  not  wholly  accomplished.  Here,  then, 
we  see  that  when  the  slave-system  of  the  ancient 


Chap  IV.]          A  MODERN  FALLACY  33 

world  was  in  its  highest  stage  of  development, 
what  Marx  and  others  represent  as  one  of  its 
normal  and  most  distinctive  features  was  so  far 
from  being  a  commonly  realised  fact  that  the 
mere  idea  of  realising  it  is  represented  by  a 
contemporary  satirist  as  the  foible  of  an  absurd 
vulgarian  whose  head  has  been  turned  by  the 
growth  of  his  own  millions. 

Indeed  the  radical  fallacy  of  the  view  we  are 
now  discussing — that  production  for  exchange 
is  in  any  sense  a  peculiarity  of  the  modern 
world,  may  be  seen  by  the  simple  reflection 
that,  if  taken  in  its  strictest  sense,  production 
for  exchange  begins  with  the  first  divisions  of 
labour,  such  as  the  allocation  of  spinning  to 
women,  and  hunting  and  husbandry  to  men ;  the 
males  of  the  family  wearing  what  is  produced 
by  the  females,  and  the  females  eating  what  is 
produced  by  the  males.  So  long,  however,  as 
the  consuming  group  is  small,  production  for 
exchange  may  be  regarded  as  a  maturing 
embryo  rather  than  a  process  which  has  been 
born  into  distinct  existence.  Its  distinct  exist- 
ence begins,  not  with  the  mere  division  of  labour 
amongst  a  group  so  small  that  the  products  are 
consumed  in  common,  but  with  such  a  separa- 
tion of  industries  that  the  persons  engaged  in 
each  constitute  a  community  by  themselves, 
each  being  detached  from  the  rest  by  the  special 
character  of  its  work,  by  its  immediate  interests, 
and  in  most  cases  by  distance. 

How  early  this  feature  developed  itself  may- 
be seen  from  what  we  know  of  Phoenicia.  The 


34  THE  PHCENICIANS  [Book  1. 

production  of  the  dyed  stuffs  for  which  the 
Phoenicians  were  famous  not  only  involved 
industries  so  totally  alien  in  kind  as  the  weaving 
by  the  Phoenicians  themselves  of  a  certain 
portion  of  the  material,  and  the  importation  of 
a  portion,  probably  still  greater,  from  remote 
countries  such  as  Egypt  and  Persia;  but  the 
business  of  dyeing  was  itself  elaborately  sub- 
divided also,  amongst  the  makers  of  the  traps 
in  which  the  shell-fish  containing  the  dye  were 
caught,  the  catchers,  the  crushers,  the  refiners 
of  the  brilliant  fluids,  the  dippers,  and  the 
highly-expert  blenders  of  dyes  of  various 
quality.  It  is  obvious  that  these  groups  were 
supported  not  by  any  sharing  amongst  them- 
selves of  their  own  immediate  products,  but  by 
other  products  fitted  to  sustain  life,  which  were 
allocated  to  each  in  exchange  for  them;  whilst 
the  bulk  of  the  completed  output  was  wealth 
for  the  Phoenicians  at  large  only  because  it  was 
exchanged  by  their  merchant  princes  for  the 
products  of  other  countries.  It  has  been  said 
that  production  for  exchange  is  as  old  as  the 
separation  of  industries.  We  shall  be  asserting 
what  to  many  people  will  perhaps  be  still  more 
self-evident,  if  we  say  that  it  is  as  old  as  com- 
merce. 

Was  commerce,  then,  prior  to  the  capitalistic 
epoch,  a  relatively  negligible  process,  as  the 
writer  just  quoted  asserts,  in  respect  either  of 
its  volume,  or  (what  is  by  no  means  the  same 
thing)  its  importance  ?  In  the  first  place,  was  it, 
as  he  suggests,  merely  a  traffic  in  superfluities? 


Chap.  IV.]  THE  PHOENICIANS  35 

An  interesting  sidelight  is  thrown  on  this  point 
by  Trimalchio.  Having  inherited,  so  he  tells 
his  guests,  one  half  of  his  master's  fortune,  he 
at  once  embarked  in  commerce  as  the  royal  road 
to  riches.  He  built  five  vessels,  and  filled  them 
with  such  assorted  goods  as  he  thought  most 
certain  to  sell  well  in  the  Roman  market.  His 
judgement  was  justified  bv  the  event.  They 
were  sold  at  an  enormous  profit.  And  of  what 
did  these  goods  consist?  A  portion,  it  is  true, 
consisted  of  superfluities — that  is  to  say,  of 
Oriental  perfumery;  but  the  larger  part  con- 
sisted of  wines,  of  beans,  and  of  bacon. 
Similarly,  the  vessel  of  Archimedes  carried  on 
her  maiden  voyage — so  Moschion  mentions — a 
comparatively  small  consignment  of  miscel- 
laneous goods,  which  may  or  may  not  have 
consisted  of  superfluities;  but  the  bulk  of  the 
cargo  consisted  of  three  things — corn,  wool, 
and  pickled  Sicilian  fish. 

The  importance  of  early  commerce,  however, 
is,  as  has  just  been  said,  not  measurable  by  its 
mere  magnitude.  Everybody  knows  that  the 
Phoenicians  imported  tin  from  Cornwall. 
Cornwall  was,  indeed,  the  chief,  though  Spain 
was  a  minor  source,  from  which  that  metal  was 
obtainable  by  the  ancient  Mediterranean 
nations.  Now  as  may  have  been  suggested  to 
the  reader  by  the  fact  already  mentioned  that 
the  nails  used  by  Archimedes  were  not  of  iron 
but  bronze,  bronze  wfes  for  the  industries  of  the 
nations  in  question  what  hardened  iron  and 
steel  are  for  those  of  the  modern  world;  and  of 


36  TIN  AND  FLINT  [Book  I. 

this  material  an  essential  element  was  tin. 
Thus,  as  Rawlinson  in  his  History  of  Phoenicia 
indicates,  this  particular  commodity,  tin,  obtain- 
able only  from  regions  then  unimaginably 
distant,  was  essential  to  the  life  of  the  whole 
civilised  world  whose  arts  and  industries  had 
developed  themselves  round  the  shores  of  the 
Mediterranean  Sea.  In  other  words,  had  it  not 
been  for  commercial  enterprise,  that  world, 
whose  civilisations  are  the  direct  ancestors  of 
our  own,  could  hardly  have  raised  itself  above 
the  conditions  of  the  Stone  Age.  Nor  is  this 
all.  If  we  go  back  to  the  Stone  Age  itself,  the 
same  situation  is  repeated.  The  arts  of  the 
Stone  Age  were  dependent  on  the  use  of  flint; 
but  flint,  like  tin,  is  obtainable  in  certain  districts 
only;  and  all  who  lived  elsewhere  must  have 
obtained  their  flints  from  these — a  transaction 
possible  only  by  means  of  exchange  or  com- 
merce. Or  again  we  may,  if  we  like,  take  the 
case  of  mediaeval  England.  No  doubt  the 
households  of  the  manorial  lords  and  the 
peasantry  were  self-supplying  to  an  extent 
which  is  almost  unknown  to-day ;  but  life  and 
the  arts  of  life  required  two  things  at  all  events 
which  in  nine  localities  out  of  ten  were  obtain- 
able by  commerce  only — that  is  to  say  salt  and 
iron.  Salt  was  obtainable  only  from  a  few 
mines  or  brine-pits,  or  on  the  sea-coast  by 
vaporisation.  Except  for  importations  from 
abroad,  iron  was  obtainable  only  from  districts 
where  ore  and  firewood  existed  in  close 
proximity;  and  iron  and  salt  alike  from  places 


Chap.  IV.]  HERBERT  SPENCER  37 

thus  peculiar  were  supplied  to  the  bulk  of  the 
population  by  an  all-pervading  process  of 
exchange. 

It  is  needless  to  multiply  illustrations  of  a 
fact  which  is  practically  universal ;  and  why  it 
is  universal  has  been  explained  with  trenchant 
simplicity  by  Herbert  Spencer  in  his  account  of 
the  beginnings  of  human  progress.  The  start- 
ing-point of  all  progress  was,  he  says,  the 
"  localisation  of  industries."  This  event  has 
resulted  from  the  varied  character  of  the 
"  habitats  "  occupied  by  neighbouring  commu- 
nities, or  by  different  portions  of  each.  Climate, 
soil,  exposure,  and  mineral  substances  are 
distributed  by  Nature  in  a  manner  so  unequal 
that  the  production  of  certain  things  is  not 
possible  at  all  except  in  certain  places,  and  is 
possible  with  a  maximum  of  advantage  in  not 
more  than  a  few.  Hence  what  we  call  civili- 
sation is  developed  by  human  effort  in  propor- 
tion as  industries  are  separated  in  such  a  way 
that  the  prosecution  of  each  is  confined  to  the 
places  which  are  most  favourable  to  it.  In 
other  words  production  with  exchange  for  its 
immediate  object  has  been  the  warp  of  civilisa- 
tion since  civilisation  first  began;  the  exchange 
of  the  products  as  distinct  from  an  immediate 
use  of  them,  has  been  its  woof ;  and  then  as  now 
commerce  threw  the  shuttle.  In  other  words 
again,  to  sum  the  matter  up,  a  process  which 
social  reformers,  professing  to  be  scientific 
historians,  have  declared  to  be  virtually  peculiar 
to  the  capitalism  of  the  modern  world,  has  been 


38  DANDIES    AND    DRUDGES          [Book  I. 

an  essential  feature  of  production  under  all 
systems  alike — not  merely  under  Serfdom  and 
Slavery  but  in  times  which  preceded  both. 

Let  us  now  take  the  other  of  the  two  asser- 
tions here  chosen  for  examination,  as  having 
till  recently  formed  an  integral  part  of  the 
version  of  economic  history  promulgated  by 
most  reformers.  This  is  the  assertion  that 
under  the  modern  capitalistic  system  persons 
of  moderate  means,  or  the  middle  classes,  are 
disappearing.  Such  an  assertion,  though 
invested  with  a  special  prominence  by  socialists, 
has  not  been  peculiar  to  them,  nor  did  they 
even  originate  it.  Before  it  began  to  figure  in 
the  manifestos  of  "  scientific  socialism,"  it  had 
been  solemnly  elaborated  by  Carlyle,  who  was 
not  even  a  democrat.  It  was  for  a  time  adopted 
by  Disraeli  himself,  and  represented  an  idea 
which,  if  vaguely,  was  very  widely  diffused. 
'  The  day,"  wrote  Carlyle,  "  seems  to  be  not 
far  distant  when  the  very  rich,  or  '  the  Dandies/ 
and  the  very  poor,  or  '  the  Drudges,'  shall  be 
two  sects  parting  England  between  them, 
each  recruiting  itself  from  the  intermediate 
ranks,  till  there  be  none  left  to  enlist  on  either 
side.  I  could  liken  them,"  he  exclaims,  "  to 
two  bottomless  boiling  whirlpools  which  have 
broken  out  on  two  opposite  quarters  of  firm 
land,  which  man's  art  might  yet  cover  in,  but 
the  diameters  of  which  are  daily  widening  .  .  . 
so  that  presently  (unless  man's  art  intervenes 
with  some  vast  reform)  even  this  intermediate 
film  will  likewise  be  washed  awav  :  and  then 


Chap.  IV.]      "  SCIENTIFIC  SOCIALISM  "  39 

we  have  the  true  Hell  of  Waters,  and  Noah's 
Deluge  is  out-deluged." 

So  far  as  this  contention  is  concerned,  all 
that  was  done  by  Marx,  as  the  founder  of 
scientific  socialism,  was  to  adopt  a  loose  opinion 
then  widely  prevalent,  to  translate  it  from  the 
language  of  sentiment  into  that  of  a  scientific 
formula,  to  assign  the  fact  asserted  to  a  single 
specific  cause,  and  present  it  as  one  of  three 
necessary  results,  inseparably  connected,  of 
which  that  cause  was  the  common  origin.  The 
cause  in  question  was,  according  to  him,  the 
substitution  of  production  by  machinery,  the 
property  of  great  employers,  for  production  by 
small  implements,  the  property  of  the  employed 
themselves — a  change,  he  said,  which  was  first 
witnessed  in  England,  where  its  effects  began 
to  be  general  by  the  beginning  of  the  nineteenth 
century. 

Such  being  the  case,  rhetorical  assertions,  like 
Carlyle's,  that  "  intermediate  films  "  were  being 
swept  away  by  "  whirlpools,"  are  reduced  by 
"scientific  socialism"  to  a  proposition  sufficiently 
definite  to  be  tested  by  detailed  evidence.  In 
the  first  place  it  relates  to  a  definitely  specified 
period.  In  the  second  place  it  relates  to  a 
definitely  specified  country;  for,  modern 
capitalism,  said  Marx,  having  been  established 
first  in  England,  it  is  in  England  that  we  must 
look  for  the  most  complete  exemplification  of 
its  results.  In  the  third  place  it  substitutes  for 
Carlyle's  intermediate  "  film "  persons  whose 
incomes  are  in  excess  of  the  earnings  of  skilled 


40  .       MARX  AND  THE  MIDDLE  CLASSES    [Book  I. 

labour,  but  do  not  approach  those  of  "  the  great 
capitalist  lords,"  or  even  reach  the  amount  at 
which  riches  are  popularly  taken  to  begin.  The 
lower  of  these  limits  is  at  the  present  time  taken 
by  most  controversialists  as  /i6o  a  year,  whilst 
the  higher  may,  according  to  the  point  of  view, 
amount  to  anything  up  to  perhaps  .£5,000.  At 
any  rate,  if  we  adopt  for  our  extremes  ,£160 
and  /Xooo,  the  persons  whose  incomes  lie 
between  these  two  amounts  will  comprise  the 
majority,  if  they  do  not  comprise  the  whole, 
of  those  whom  Marx  had  in  view  when  he  spoke 
about  the  Middle  Classes. 

What,  then,  with  regard  to  these  classes  did 
Marx  mean  by  the  assertion  that,  under 
capitalism,  they  were  being  gradually  "crushed 
out"?  He  meant,  writing  in  the  year  1865, 
that  ever  since  the  year  1801  incomes  in 
England  lying  between  the  limits  in  question 
had,  as  a  statistical  fact,  been  continually 
decreasing  in  number,  and  would  necessarily, 
unless  the  capitalist  system  were  abolished,  go 
on  decreasing  until  there  were  none  left. 

Now  if  there  is  any  difficulty  in  testing  this 
proposition,  it  lies  not  in  the  discovery  of 
evidences  sufficiently  precise  and  authoritative. 
It  lies  rather  in  the  selection  of  them,  their 
number  is  so  ample.  These  comprise  two 
series  of  records,  extending  from  the  opening 
year  of  the  nineteenth  century  to  to-day,  one  of 
these  giving  the  results  disclosed  by  the  collec- 

•  • 

tion  of  Income-tax,  as  imposed  at  various  dates ; 
the  other  giving  the  number  of  private  houses 


Chap.  IV.]  ~   MIDDLE  CLASS  INCOMES  41 

in  England,  classified  year  by  year  in  accord- 
ance with  their  annual  values.  The  significance 
of  these  two  sets  of  data,  if  we  aim  at  complete 
exactitude,  cannot  indeed  be  determined  with- 
out enquiries  which  at  the  present  moment 
would  be  impracticable  :  but  the  broad  results 
derivable  from  the  two  taken  together  lie  on 
the  surface,  and  are  enough  for  our  present 
purpose.  No  minor  modifications  can  affect 
them  in  any  substantial  way. 

Of  the  hundred  and  thirteen  years,  then,  for 
which  the  modern  capitalist  system  has  by  this 
time  been  on  its  trial  in  England,  let  us  start 
with  considering  one  particular  portion — a 
middle  period  consisting  of  thirty  years,  and 
beginning  with  the  year  1850.  In  the  present 
connection  this  period  has  a  special  interest, 
because  it  was  in  the  middle  year  of  it — 1865 — 
that  the  socialist  doctrine  of  the  disappearance 
of  middle-class  incomes  was  formally  pro- 
pounded by  Marx  in  the  work  that  made  him 
famous.  If,  therefore,  this  doctrine  should 
have  any  truth  whatever  in  it,  we  may  expect 
that  its  truth  would  be  very  signally  illustrated 
in  what  were  then  for  him  the  immediate  past 
and  future.  Now  it  so  happens  that  this 
particular  period  was,  with  reference  to  the 
precise  question  before  us,  examined  by  the 
well-known  statistician,  Professor  Leone  Levi, 
aided  by  a  prominent  official  of  the  Department 
of  Inland  Revenue.  Taking  the  higher  limit 
of  Middle  Class  incomes  as  ,£1,000,  and  the 
lower  as  .£150,  his  definition  of  them  was 


42  MIDDLE  CLASS  INCOMES  [Book  I. 

virtually  identical  with  that  which  has  been 
adopted  here.  His  aim  was  not  to  exhibit  the 
number  of  such  incomes  as  a  whole;  for  he 
confined  himself  to  incomes  identified  by  the 
collectors  of  Income-tax  as  derived  from 
businesses  not  carried  on  as  companies.  His 
aim  was  to  exhibit  their  rates  of  increase  only. 
Dividing,  then,  the  business  incomes  identified 
as  earned  by  individuals  into  two  groups — 
namely  those  ranging  from  ^150  to  ,£500,  and 
those  ranging  from  ^500  to  ,£1,000,  he  showed 
that  during  the  thirty  years  in  question  the 
number  of  the  former  had  increased  by  136  per 
cent.,  and  that  of  the  latter  by  125  per  cent., 
whilst  134  per  cent,  was  the  increase  for  both 
groups  taken  together. 

Let  us  now  extend  our  survey,  and  consider 
what  has  happened  with  regard  to  Middle  Class 
incomes  as  a  whole  from  the  beginning  of 
capitalist  ascendancy  up  to  the  present  day. 

Approximate  accuracy  being  all  that  is  here 
required,  the  present  number  of  such  incomes 
in  England  is  sufficiently  indicated  by  the 
number  of  private  houses  whose  annual  value 
lies  within  certain  limits.  It  is  commonly 
agreed  that  houses  whose  annual  cost  to  their 
occupants  is  more  than  £20  in  respect  of  rent 
alone  (which  means,  if  rates  be  included,  ^25 
as  a  minimum)  mainly  represent  incomes  in 
excess  of  ^160,  whilst  those  whose  rental  value 
does  not  exceed  ,£100,  will  mainly  represent 
incomes  not  exceeding  ,£1,000.  The  total 
number  of  such  dwellings  in  the  year  1910, 


Chap  IV.]  MARX'  FALLACIES  43 

exclusive  of  lodging  houses  and  places  of 
residence  over  shops,  was  (for  England  and 
Wales)  1,322,000.  From  this  number  a  certain 
deduction  must  be  made  in  respect  of  houses 
shared  by  more  families  than  one;  but  when 
this  fact  has  been  allowed  for  to  the  fullest 
extent  possible,  the  number  of  such  houses 
occupied  by  single  families,  and  each  repre- 
senting an  income  within  the  limits  here  in 
question,  cannot  have  been  less  than  1,100,000. 

Let  us  now  see  how  matters  stood  in  the  year 
1801.  The  records  of  private  houses  relating 
to  that  year  are  not  sufficiently  detailed  to  be 
serviceable  for  our  present  purpose ;  but  other 
evidence  is  extant,  which  will  presently  be 
described  at  length,  of  a  yet  more  direct  kind. 
This  evidence  shows  that  the  actual  number  of 
incomes  between  ^160  and  ^1,000  could  not, 
in  the  year  1801,  have  been  more  than  90,000, 
if  indeed  it  was  quite  as  much. 

What  then  is  the  net  result  of  these  broad 
and  indubitable  facts  as  related  to  the  doctrine 
of  Marx,  so  long  and  so  widely  accepted,  that 
the  number  of  such  incomes  in  England  has, 
under  the  influence  of  capitalism,  been  for  more 
than  a  hundred  years  constantly  growing  less 
and  less?  If  that  doctrine  be  taken  to  mean 
that  their  number  has  been  diminishing 
absolutely,  its  absurdity  is  so  wild  as  to  render 
comment  superfluous.  It  may,  however,  be 
urged  that  there  has  meanwhile  been  an  increase 
of  26,000,000  in  the  population  of  the  country 
as  a  whole;  and  that  Marx,  when  he  spoke  of 


44  ERRORS  OF  REFORMERS  [Book  1. 

the  number  of  the  Middle  Classes  as  diminish- 
ing, meant  to  speak  of  a  diminution  which  was 
not  absolute,  but  relative.  Even,  however,  had 
this  been  his  meaning  (which  it  was  not)  his 
doctrine  would  practically  have  been  no  nearer 
to  the  truth.  Between  the  years  1850  and  1880 
the  population  increased  from  seventeen  to 
twenty-six  millions — that  is  to  say  in  a  ratio  of 
ten  to  fourteen  only.  The  number  of  Middle 
Class  incomes  had  increased,  during  the  same 
period,  in  a  ratio,  as  we  have  seen  already,  of 
ten  to  twenty-three.  Between  the  years  1801 
and  1911  the  population  had  increased  from 
nearly  nine  millions  to  thirty-six — that  is  to  say, 
in  a  ratio  of  one  to  four.  The  number  of 
Middle  Class  incomes  had,  as  we  have  seen 
already,  increased  from  ninety  thousand  to 
considerably  over  a  million — that  is  to  say  in  a 
ratio  of  one  to  twelve.  In  whatever  way  this 
doctrine  is  turned  or  twisted,  it  is  so  far  from 
being  correct  as  a  statement  of  the  actual  results 
of  capitalism,  that  it  is  related  to  facts  only  in 
the  sense  of  being  a  direct  inversion  of  them. 
We  will  here  end  our  consideration  of  errors 
on  the  part  of  reformers  which,  having  ceased 
to  be  "  planks  "  of  their  historical  "  platform," 
no  longer  require  refutation  for  the  purposes 
of  practical  controversy.  They  have  been 
dealt  with  as  subjects  of  a  useful  preliminary 
criticism,  because  they  have  all,  within  times 
comparatively  recent,  been  asserted  as  indu- 
bitable truths  by  earnest  and  influential  men; 
because  popular  thought  and  sentiment  haye 


Chap.  IV.]          FACTS  AND  BELIEFS  45 

been  widely  and  profoundly  influenced  by 
them;  and  because  they  show  what  a  highly 
complex  product  is,  in  most  cases,  that  sense 
of  grievance  to  which  reformers  make  appeal, 
and  how  largely  dependent  on  beliefs  as  to 
facts  which  are  beyond  experience,  rather  than 
on  facts  as  experienced  by  the  aggrieved 
persons  themselves. 

We  will  now  pass  on  to  doctrines  which  are 
in  full  vitality  to-day,  and  enquire  whether  they 
are  less  erroneous  than  those  which  we  have 
been  just  considering. 


BOOK    II. 

AN  EXAMINATION  OF  THE  FUNDAMENTAL  ERROR 
UNDERLYING  CURRENT  THEORIES  OF  REFORM. 


CHAPTER  -I. 

(THE  doctrine,  whose  absurdity  has  been  exposed 
in  our  preliminary  criticism,  that  one  of  the 
main  results  of  the  modern  capitalistic  system 
has  been  to  diminish  the  number  of  moderate 
or  middle  class  incomes,  is,  let  it  be  said  once 
more,  by  no  means  so  frequent  now  in  the 
mouths  of  reformers  as  it  once  was.  As 
originally  formulated  by  Marx,  however,  and 
accepted  as  scientifically  true  by  the  reformers 
of  the  nineteenth  century,  it  did  not  stand  alone. 
It  was  associated  with  two  others,  the  three 
together  being  as  follows : — 

Under  the  modem  system  of  capitalism  (the 
results  of  which  are  most  apparent  in  England] 
it  is  a  matter  of  theoretical  necessity  and  of 
historical  fact  also,  that,  whether  the  middle 
classes  dwindle  or  no,  and  in  the  end  will 
altogether  disappear,  the  rich  become  ever 
richer^  and  the  mass  of  the  population  poorer. 

Now  though  the  doctrine  as  to  the  middle 
classes  is  more  or  less  in  abeyance,  the  two 
others,  relating  to  the  rich  and  the  poor,  are 
promulgated  as  industriously  to-day  as  they 
ever  were  in  the  past,  and  probably  win  accept- 
ance from  an  even  wider  public.  They  have, 
it  is  true,  been  subjected  to  certain  modifica- 
tions— to  some  by  socialists,  to  others  by  more 
tautious  radicals;  but  the  general  version  of 
economic  history  embodied  in  them  is  not  only 

49 


5-  DIFFUSION  OF    WEALTH  [Book  li. 

not  discarded,  but  has  merely  re-expressed 
itself  in  more  plausible  forms,  so  that  numbers 
even  of  sober  men  are  to-day  very  timid  in 
rejecting  it.  It  is,  indeed,  for  contemporary 
reformers  what  an  old  story  is  for  a  novelist  who 
tells  it  in  an  amended  way,  divesting  the  scenes 
and  characters  of  traits  too  outrageous  to  be 
credible,  but  leaving  the  sequence  of  events  and 
the  principal  situations  as  they  were.  As  thus 
modernised  for  the  present  generation  it  may 
be  fairly  summed  up  as  follows,  in  terms  which 
are  largely  borrowed  from  a  member  of  the 
present  Government. 

The  structure  of  English  society  at  the  begin- 
ning of  the  nineteenth  century  was  compara- 
tively sound  and  simple.  Wealth  existed,  but 
was  not  in  the  aggregate  overwhelming. 
Poverty  existed,  but  not  to  an  extreme  degree. 
In  any  case,  since  that  time  the  wealth  of  the 
country  as  a  whole  has,  relatively  to  the  popula- 
tion, increased  to  so  vast  an  extent  that,  if  only 
it  were  well  distributed,  it  might  (to  use  a  phrase 
of  to-day)  be  "as  plentiful  as  water  everywhere." 
As  a  matter  of  fact  there  has  been  no  such 
result  as  this.  In  whatever  directions  the  new 
wealth  may  have  gone,  there  has  been  no 
general  diffusion  of  it.  A  portion  no  doubt  has 
been  secured  by  middle  class  families,  and  a 
limited  section  of  highly  skilled  artizans;  but 
this  portion  has  been  small ;  and  the  mass  of 
the  working  classes  are  no  better  off  than 
formerly.  Their  wages  in  terms  of  money 
have  perhaps  risen  slightly;  but  what  they  can 


Chap.  1.]      MR.  MASTERMAN'S  FALLACIEvS  51 

buy  with  their  money  in  the  way  of  comforts 
and  decencies  is  less  to-day  than  it  was  in  the 
days  of  their  great-great-grandfathers.  Where, 
then,  have  the  missing  millions  gone?  They 
have  gone  to  swell  the  fortunes,  already  great, 
of  the  rich,  the  result  being,  as  the  statesman  just 
referred  to  expresses  it,  that  we  see  in  this  coun- 
try to-day,  to  an  extent  never  seen  before,  "  a 
society  fissured  into  unnatural  plenitude  on  the 
one  hand,  and  (as  an  inevitable  consequence) 
into  unnatural  privation  on  the  other."  This 
assertion  is  not  taken  from  any  electioneering 
speech,  and  does  not  therefore  represent  the 
excitement  of  an  unguarded  moment.  It  is 
taken  from  a  book1  which  the  author  has  many 
times  re-issued,  and  in  which  he  repeats  and 
elaborates  it  so  as  to  leave  no  doubt  of  his 
meaning.  The  riches  of  the  rich  in  England 
since  the  beginning  of  the  nineteenth  century 
have,  according  to  him,  not  only  increased 
absolutely,  which  indeed  would  have  been  but 
natural ;  they  have  increased  out  of  all  propor- 
tion to  the  increase  of  wealth  generally.  The 
golden  head  has  grown  faster  than  any  other 
part  of  the  body,  and  is  crushing  the  limbs  by 
the  enormity  of  its  mere  brute  weight.  In  other 
words,  the  percentage  of  the  national  income 
represented  by  what  this  writer  calls  "  the  piled 
up  aggregations  of  the  superwealthy  "  has  by 
this  time  come  to  be  something  so  preposterous, 
and  the  percentage  left  for  the  remainder  of  the 

i.  "  The  Condition  of  England,"  by  Mr.  Masterman. 


52  DISTRIBUTION   OF  WEALTH       [Book  II 

community  so  small,  that  the  principal  evils  oi 
the  present  time  are  attributable,  mainly  if  not 
exclusively,  to  this  novel  and  peculiar  cause. 

Such  is  the  estimate  formulated  by  a 
prominent  radical  statesman  of  the  situation 
with  which  it  is  the  mission  of  contemporary 
radicalism  to  deal;  and  it  fairly  represents  the 
ideas  now  dominant  in  the  minds,  not  only  of 
radicals  generally,  and  (it  is  needless  to  add  of 
socialists),  but  also  of  numerous  persons  who 
are  otherwise  opposed  to  both.  Accordingly, 
before  we  attempt  to  examine  any  questions  of 
detail,  it  will  be  necessary  to  begin  with  a  con- 
sideration of  the  general  picture  or  conception 
of  things  to  which  all  the  assertions  of  reformers 
as  to  questions  of  detail  are  subordinated,  and 
from  which  indeed  they  are  in  part  dedused. 

How,  then,  in  respect  of  its  main  features 
does  the  distribution  of  wealth  in  England  in 
the  year  1911  compare  broadly  with  its  distri- 
bution at  the  beginning  of  the  nineteenth 
century? 

It  has  been  contended  by  some  that  a 
comparison  of  this  kind  is  impossible,  because, 
though  so  far  as  the  present  time  is  concerned 
the  requisite  evidences,  if  not  complete,  are 
abundant,  no  similar  evidences  as  to  the  earlier 
time  is  extant.  Thus  a  serious  critic  in  a  serious 
conservative  journal  has  declared,  with  regard 
to  the  beginning  of  the  nineteenth  century,  that 
nobody  can  make  so  much  as  a  reasonable 
guess  at  what  the  income  of  the  country  at  that 
time  was,  to  say  nothing  of  the  manner  in  which 


Chap.  I.]  INCOMES  IN  1801  53 

it  was  distributed  amongst  different  classes. 
That  such  views  should  be  prevalent  is  enough 
to  show  the  need  for  a  more  careful  scrutiny 
of  actualities. 

The  evidences  supposed  to  be  wanting  are 
accessible  to  those  who  look  for  them.  It  has 
already  been  observed,  and  it  is  a  matter  of 
common  knowledge,  that  this  country  was,  in 
the  year  1801,  subjected  to  an  income-tax,  of 
which  the  general  results  have  been  preserved. 
But  it  is  not  commonly  known — for  the  fact  has 
escaped  the  attention  even  of  historians  like 
McCulloch  and  Porter — that  the  records  which 
were,  according  to  McCulloch,  destroyed,  still 
exist  in  their  integrity.  Such,  however,  is  the 
case.  It  must  be  added  that  the  year  in 
question  was  the  year  of  the  first  census.  A 
report  on  that  census,  and  the  report  relating 
to  the  income-tax  were  printed  and  issued  in 
conjunction  by  order  of  the  House  of  Commons 
in  the  year  1802,  and  from  these  two  documents 
together  a  mass  of  facts  is  ascertainable  which 
to  most  readers  will  be  novel.  The  year  1801 
shall  be  therefore  our  starting-point. 

The  then  population  of  England  and  Wales 
was  approximately  9,000,000,  which  may  be 
taken  as  representing  1,800,000  families,1  and 
100,000  families,  or  half  a  million  persons,  are 

i.  That  is  to  say  "  natural  families  "  averaging  five 
persons.  If  the  word  "family"  is  taken  to  mean  a  house- 
hold, the  number  was  much  less ;  for  the  overcrowding  of 
the  population  in  1801  was  much  greater  than  it  is  to-day. 


54  INCOMES  IN   1801  [Book  II. 

shown  by  the  returns,  which  are  singularly 
systematic  and  minute,  to  have  been  supported 
on  incomes  in  excess  of  ^160  a  year.  Of  the 
rest  of  the  inhabitants  of  the  country — 8,500,00x3 
persons — more  than  4,500,000  were  women  and 
children  not  working  for  wages,  whilst  the 
number  of  the  actual  bread-winners  was  a  little 
below  4,000,000,  of  whom  about  one-third  were 
women,  lads  and  girls,  and  the  number  of  the 
adult  males  about  two  millions  and  a  half.  If 
we  roughly  take  all  those  persons  as  belonging 
to  the  working  classes  who  were  not  supported 
on  incomes  exceeding  ^160  a  year,  the  working- 
classes  consisted  of  1,700,000  families;  and  for 
every  two  of  such  families  there  were,  on  an 
average,  three  adult  male  bread  winners.  The 
entire  number  of  separately  received  incomes, 
earned  or  unearned,  from  the  largest  down  to 
the  smallest,  may  be  taken  with  reasonable 
accuracy  as  4,100,000. 

Let  us  now  subdivide  these  farther  into  six 
characteristic  groups,  and  see  what,  according  to 
the  returns,  was  the  number  comprised  in  each. 
In  accordance  with  a  note  appended  to  the 
document  in  question,  the  numbers  actually 
tabulated  shall  in  each  case  be  increased  by 
one-eighth,  as  it  was  subsequently  estimated 
that  they  were  deficient  by  approximately  that 
amount,  and  for  simplicity's  sake  round  figures 
shall  be  employed.  The  advantage  of  sim- 


Chap.  I.]  INCOMES  IN  1801  55 

plicity  will  be  great,  and  the  sacrifice  will  be 
so  small  as  to  be  negligible.1 

There  is,  then,  detailed  evidence  to  show  that 
in  the  year  1801,  out  of  about  4,100,000  earned 
and  unearned  incomes, 

The  number  of  those  exceeding/"  5,000 

a  year  was  about  ...         ...         ...       1,100 

The  number  of  those  between  ,£1,000 

and  ^5,000  a  year  was  about  ...  11,000 
The  number  of  those  between  ,£160 

and  ,£1,000  a  year  was  about  ...  90,000 
The  number  of  those  between  3O/-  and 

62  /-  a  week  was  about    ...          ...     90,000 

The  number  of  those  between  22  /-  and 

3O/-  a  week  was  about  ...          ...   160,000 

The  number  of   those   below   22  /-   a 

week  or  /6o  a  year  was  about     3,752,ioo2 


Let  us  next  consider  how  matters  stand 
to-day,  when  set  forth  in  a  similar  manner. 

The  population  of  England  and  Wales 
to-day  is  36,000,000.  The  number  of  persons 
receiving  separate  incomes,  whether  earned  or 
unearned,  is  in  excess  of  i6,ooo,ooo3  Of  these, 

1.  The  total  number  of  persons  liable  to  income-tax  on 
more  than  ^60  a  year,  actually  recorded  in  the  returns  for 
1801,  was  about  315,000.     The  number  shown  in  the  text 
(one-eighth  being  added)  is,  as  will  be  seen,  about  352,000. 

2.  Between  1,310,000  and  1,500,000  of  these  would  have 
been  women,  lads,  and  girls. 

3.  The    number    for    the    United    Kingdom    is    about 
20,000,000. 


56  CLASSES  OF  INCOMES  [Book  II. 

about  15,000,000  whom,  following  our  previous 
procedure,  we  may  group  together  as  the  work- 
ing classes,  earn  or  receive  not  more  than  ,£160 
a  year,  or  625.  a  week.  The  number  of  persons 
in  England  and  Wales  receiving  incomes  in 
excess  of  this  amount  is,  as  we  shall  see 
presently,  about  1,200,000. 

For  the  purpose  of  subdividing  these  into  six 
groups,  as  we  have  done  in  the  case  of  the  year 
1801,  the  principal  evidences  are  as  follows. 
As  to  incomes  exceeding  ,£5,000  a  year,  their 
number  is  directly  ascertainable  from  the 
returns  relating  to  supertax.  As  to  incomes 
lying  between  ,£1,000  a  year  and  ,£5,000,  we 
may  take  their  number  as  corresponding  to  the 
number  of  private  houses  whose  annual  values 
lie  between  ,£100  and  ,£200.  As  to  incomes 
lying  between  ,£160  and  ,£1,000,  it  has  already 
been  explained  that  we  may,  after  making  a 
certain  deduction,  take  their  number  as  corres- 
ponding to  the  number  of  private  houses  whose 
annual  value  lies  between  ,£20  and  ,£100.  As 
to  the  incomes  of  the  15,000,000  workers  which 
lie  below  the  present  income-tax  limit,  the 
elaborate  investigations  of  the  Board  of  Trade, 
mainly  relating  to  the  years  1906-7,  will  provide 
us  with  evidence  sufficient  for  the  comparison 
here  in  view  :  but,  before  making  use  of  this, 
there  is  one  fact  to  be  considered. 

Of  such  incomes,  about  one-third  consist  of 
the  earnings  of  women,  lads  and  girls.  Now 
the  precise  figures  for  1801  stop  short  at 
incomes  exceeding  ,£60  a  year,  or  22/-  a  week  : 


Chap.  I.]          ADULT   MALE  WORKERS  57 

and  not  only  is  it  certain  that  in  1801  no  such 
incomes  were  earned  by  women,  lads  or  girls; 
but,  as  appears  from  the  latest  investigations  of 
the  Board  of  Trade,  that  only  a  small  per- 
centage of  them  are  earning  such  incomes  now. 
Hence  though  the  earnings  of  all  of  them  may 
have  very  greatly  increased,  we  shall,  if  we  take 
£60  as  our  standard,  have  no  adequate  means 
by  which  this  increase  may  be  measured,  just 
as  the  growth  of  children  from  six  to  twelve 
years  old  could  not  be  measured  by  reference 
to  a  vertical  scale  on  which  no  point  was  marked 
that  was  lower  than  sixty  inches.  The  average 
stature  of  the  children  might  have  risen  from 
thirty-six  inches  to  fifty;  but  until  it  exceeded 
sixty  inches,  such  a  method  of  measurement 
would  record  no  growth  at  all.  For  this  reason 
the  earnings  of  women,  lads  and  girls  must  be 
excluded  from  our  present  survey,  and  our 
attention  must  be  confined  to  those  of  adult 
males. 

With  regard  to  adult  males,  the  case  is  totally 
different.  Here  the  dividing  line  of  ,£60  a 
year,  or  22 /-  a  week,  provides  us  with  an  index 
whose  informative  value  is  of  the  highest.  It 
appears  from  a  comprehensive  analysis  of  the 
Board  of  Trade  returns,  supplemented  by  the 
results  of  a  semi-official  enquiry,  recently 
carried  out  by  a  committee  of  well-known 
economists,  that,  out  of  about  10,000,000  adult 
male  workers,1  whose  earnings  are  not  in  excess 

i.  This  figure  includes  not  only  wage-paid  labourers  but 
the  lower  middle  classes. 


$8  GROUPS   OF  INCOMES  [Book  II. 

of  62 /-  a  week,  or  ^i 60  a  year,  about  2,000,000 
earned  less  than  22 /-  a  week,  about  2,000,000 
earned  between  22 /-  and  3O/-,  and  about 
6,000,000  earned  between  3O/-  and  62/-.  The 
significance  of  these  facts  with  regard  to  the 
adult  male  workers  will  be  evident  when  we 
compare  them  with  those  given  already,  which 
corresponded  to  them  in  the  year  1801.  The 
number  of  adult  male  workers  having  been  at 
that  time  about  2,500,000,  it  will  be  seen  that 
those  earning  more  than  3O/-  a  week  were 
approximately  90,000,  or  only  3'6  per  cent,  of 
the  whole;  that  those  earning  from  22 /-  to  3O/- 
a  week  were  160,000,  or  only  6'4  per  cent,  of 
the  whole;  and  that  those  earning  less  than  22 /- 
a  week  amounted  to  no  less  than  90  per  cent,  of 
the  whole.  On  the  other  hand,  at  the  present 
day,  if  we  take  these  groups  in  the  same  order, 
it  will  be  seen  that  the  percentage  of  the  whole 
represented  by  each  respectively  has  risen  in 
the  case  of  the  first  from  3'6  to  60 :  that  it  has 
risen  in  the  case  of  the  second  from  6'4  to  20; 
and  that  it  has  fallen  to  20  per  cent.,  in  the  case 
of  the  third,  from  90.  In  other  words,  the 
situation  has  been  almost  exactly  inverted. 
Whereas  in  1801  only  10  per  cent,  of  the  adult 
male  workers  earned  more  than  ^"60  a  year,  at 
the  present  time  only  20  per  cent,  earn  less. 

These  observations  having  been  made,  thr 
whole  of  the  six  characteristic  groups  of 
incomes,  as  already  dealt  with  in  respect  of  the 
earlier  period,  shall  now  be  taken  together,  and 


Chap.  l.J  INCOMES   IN   1910  59 

the  number  comprised  in  each  shall  be  given  as 
it  is,  or  approximately  as  it  is,  to-day. 

In  the  year  1910,  then,  out  of  nearly 
11,200,000  incomes  separately  earned  or  re- 
received  in  England  and  Wales  (exclusive  of 
the  wages  of  women,  lads,  and  girls)  detailed 
evidence  of  the  kinds  already  specified  shows 
that— 

The  number  of  incomes  exceeding  ,£5,000  a 
year  was  about  10,000  (supertax  figures).1 

;The  number  of  incomes  between  ^"1,000  and 
,£5,000  a  year  was  about  60,000  (evidence 
of  houses).2 

tThe  number  of  incomes  between  ,£160  and 
,£  1,000  a  year  was  about  1,100,000  (evi- 
dence of  houses).2 

,The  number  of  incomes  between  3O/-  and  62 /- 
a  week  was  about  6,000,000  (Board  of 
Trade  figures). 

(The  number  of  incomes  between  22/-  and  3O/- 
a  week  was  about  2,000,000  (Board  of 
Trade  figures). 

;The  number  of  incomes  below  22 /-  a  week  was 
about  2,000,000  (Board  of  Trade  figures).2 

i.  The  supertax  total  for  the  United  Kingdom  is  about 
11,000.  One-tenth  is  here  deducted  in  respect  of  Scotland 
and  Ireland. 

a.  See  Book  III,  Chapters  i  and  ii,  where  the  figures 
dealt  with  relate  not  to  England  and  Wales,  but  to  Great 
Britain  or  else  to  the  United  Kingdom. 


6o  1801   AND   1910  [Book  II. 

Here  we  have  two  sets  of  comparable  figures 
before  us — those  for  1910  and  those  for  1801 — 
the  immense  significance  of  which,  if  they  were 
merely  set  side  by  side  and  left  to  speak  for 
themselves,  would  be  obvious  to  those  familiar 
with  statistical  presentations  of  history.  By 
most  readers,  however,  it  will  probably  be  best 
understood  if  we  express  it  in  a  pictorial  form 
which  appeals  more  directly  to  the  imagination. 


CHAPTER    II. 

WE  will  begin,  then,  with  representing  the 
condition  of  things  in  1801  by  an  imaginary 
town  and  its  environs,  containing  a  population 
of  9,000  persons.  We  shall  thus  have  a  unit 
representing  a  thousandth  part  of  what  was  then 
the  population  of  England  and  Wales — that  is 
to  say  9,000,000 :  and  the  total  number  of 
incomes  in  each  group,  as  already  given,  can, 
by  the  simple  process  of  striking  off  three 
noughts,  be  reduced  to  the  number  that  would 
have  existed  in  such  a  typical  microcosm.  Thus 
the  total  number  of  incomes  exceeding  ,£5,000 
a  year  having,  then,  as  we  have  seen,  been 
something  over  1,000,  and  the  total  number 
between  £160  and  £1,000  having  been  about 
90,000,  we  may  say  with  sufficient  accuracy  that 
in  our  town  of  9,000  inhabitants  there  would 
have  been  one  income  of  the  former  amount, 
and  90  incomes  of  the  latter ;  and  so  on  through- 
out. 

We  will  next  apply  the  same  treatment  to 
incomes  as  they  exist  to-day,  so  that  the  figures 
for  both  dates  may  be  reduced  to  a  common 
denominator.  The  population  of  England  and 
Wales  to-day  being  36,000,000,  is  almost 
exactly  four  times  as  great  as  it  was  in  the  year 
1801.  A  typical  population,  therefore,  of 

9,000  persons  will  in  this  case  represent,  not  a 

61 


62  A   TOWN   IN    1801  [Book  II. 

thousandth,  but  a  four-thousandth  part  of  the 
whole ;  and  in  order  to  make  such  a  community 
representative,  the  actual  number  of  incomes  in 
each  group  must  be  reduced,  not  only  by 
striking  off  three  noughts  as  previously,  but  also 
by  dividing  this  reduced  product  by  four. 
Thus  the  total  number  of  incomes  exceeding 
;£5,ooo  a  year  being  to-day  about  10,000,  the 
average  number  per  9,000  persons  will  be 
strictly  two  and  a  half ;  and  for  purposes  of  a 
broad  comparison  we  may  conveniently  call  it 
two.  The  total  number  of  incomes  between 
;£i6o  and  ,£1,000  being  to-day  about  1,100,000, 
the  average  number  per  9,000  persons  will 
similarly  be  275;  and  so  on  throughout. 

We  will  assume  farther,  in  both  cases,  that 
there  is  one  family  of  five  persons  to  a  house; 
that,  in  the  case  of  incomes  exceeding  ,£160  a 
year,  there  is  one  house  to  every  income;  and, 
in  the  case  of  incomes  not  exceeding  that 
amount,  there  are  about  two  houses  to  every 
three  incomes  earned  by  adult  males. 

The  way  in  which  these  preliminary  assump- 
tions will  work  out,  may  be  conveniently  sum- 
marised thus :— 

In  a  town  and  its  environs  containing  9,000 
inhabitants  and  1,800  houses,  incomes  and 
houses  would,  at  the  two  dates  specified,  have 
been  as  under,  on  the  supposition  that  the 
distribution  followed  that  prevailing  in  England 
and  Wales  as  a  whole.  The  number  of  incomes 
is  exclusive  of  the  wages  earned  by  women,  lads 
and  girls. 


Cnap.  II.]      A  PICTORIAL  COMPARISON  63 

1801.  1910. 


Range  of  Income*  J§         11-3  1  i  •?  & ! 

llll 

fc-'  fc§ 


Over  ,£5,000  a  year       i          i    ...  2  2 

;£i,ooo  to  ,£5,000       ii       ii   ...  15  15 

;£i6o  to  ,£1,000...       90       90  ...  275  275 

3O/- to  62 /-a week       90       60  ...  1,384  908 

22/- to  3O/-aweek     160     106  ...  462  300 

Under  22)-  a  week  2,248  1,532   ...  462  300 

One  more  set  of  assumptions  still  remains  to 
be  made — namely,  that  every  house  represent- 
ing an  income  of  over  ,£5,000  a  year  is  a 
castellated  structure  with  a  tower  and  a  flag 
flying  on  it;  that  every  house  representing  an 
income  between  ,£1,000  a  year  and  ,£5,000  is 
a  flat-roofed  "  classical  mansion,"  which  is  dis- 
tinguished by  a  pillared  portico;  that  every 
house  representing  an  income  between  ,£160  a 
year  and  ;£i,ooo  is  distinguishable  by  being 
roofed  with  slates;  that  every  house  represent- 
ing an  income  between  ,£160  a  year  and  ;£6o, 
is  distinguishable  by  being  roofed  with  tiles;  and 
that  those  representing  incomes  below  ,£60  a 
year,  or  22 /-  a  week,  are  distinguishable  by 
being  roofed  with  thatch;  and  we  will  imagine 
an  inquisitive  stranger  visiting  such  a  town  in 
the  year  1801. 

The  town,  we  will  so  suppose,  lies  in  a  hollow 
with  wooded  slopes  surrounding  it;  and  from 
one  of  these  slopes,  as  he  looks  through  a  gap 


64  A  TOWN  IN  1801  [Book  II. 

in  a  hedge,  he  sees  it  spread  out  beneath  him. 
His  first  impression  is  that  it  is  altogether  a  town 
of  thatch,  the  prevailing  colour  being  brown ; 
but  he  presently  notes  that  the  brownness  is 
variegated  here  and  there  by  the  gleamings  of 
blue  slate,  or  by  short  red  streaks  indicative  of 
a  street  or  two  roofed  with  tiles.  Presently,  as 
his  eyes  wander  from  the  town  to  its  environs, 
he  realises  that,  separated  from  one  another  by 
a  quarter  of  a  mile  or  more,  certain  houses  with 
porticoes  show  their  white  fronts  amongst 
shrubberies;  whilst  at  one  point  a  castle  lifts 
above  a  group  of  trees  some  turrets  on  the 
highest  of  which  a  solitary  flag  is  fluttering. 
Having  entered  the  town  to  examine  things 
more  minutely,  and  having  lost  himself  in  the 
region  of  thatch,  he  at  last  reaches  a  street  about 
a  quarter  of  a  mile  long,  lined  with  houses  which 
are  slated,  which  have  high  Georgian  windows, 
and  some  of  which  bear  on  their  doors  a  brass 
plate  with  a  name  on  it.  Here  he  encounters 
a  personage  who  is  a  house-agent  and  surveyor 
of  taxes,  and  from  him  he  learns  without 
difficulty  the  following  interesting  particulars. 
The  castle  with  the  flag  is  one  of  the  local 
sights.  There  is  nothing  in  those  parts  to 
compare  with  it.  The  mansions  with  the 
pillared  porticoes,  though  they  differ  consider- 
ably in  size,  are  all  fit  for  the  honour  of  being 
occupied  by  a  county  family  :  and  round  the 
town  there  are  no  fewer  than  eleven  of  them. 
The  street  which  is  the  scene  of  this  conversa- 
tion contains  ninety  houses — forty-five  on  each 


Chap.  II.]  A  TOWN  IN   1911  65 

side — not  one  of  which  is  the  home  of  a  citizen 
having  anything  less  than  ^160  a  year.  Some 
of  these  citizens  must  have  nearly  ^"1,000.  Of 
tiled  houses  there  are  nearly  170,  each  of  these 
containing  one  worker  or  more  who  is  making — 
to  say  the  least  of  it — his  22 /-  a  week;  so/-, 
4O/-,  and  even  6o/-  being  the  earnings  of  a 
considerable  number.  These  tiled  houses,  if 
arranged  in  opposite  rows  would  make  up  a 
street  nearly  half  a  mile  in  length ;  whilst  as  to 
thatched  houses,  occupied  by  the  mass  of  the 
population,  none  of  whose  earnings  are  up  to 
the  twenty-two  shilling  standard — these  houses 
would,  if  set  in  a  line,  reach  to  another  town 
nearly  ten  miles  away. 

And  now  let  us  suppose  that  our  stranger 
returns  to  his  own  home,  falls  into  a  deep  sleep, 
and  wakes  up  like  Rip  van  Winkle  no  years 
afterwards,  determined  to  revisit  the  scene 
which  it  seems  to  him  he  was  inspecting  yester- 
day. He  discovers  that  somebody  is  watching 
his  return  to  consciousness — a  gentleman  of 
excitable  aspect,  who  describes  himself  as  a 
social  reformer.  The  situation  of  the  stranger 
is  elucidated;  and  the  reformer,  having  learnt 
his  intentions,  addresses  him  in  these  solemn 
terms  :— 

;'  My  very  dear  friend,  you  must  prepare 
yourself  for  a  grievous  shock.  The  condition 
of  England  while  you  slept  has  been  steadily 
growing  worse  and  worse.  This  once  was  a 
land  of  plenty.  It  is  a  land  of  starvation  now, 
and  the  town  you  are  about  to  revisit  is  an 


66  A  TOWN   IN   1911  [Book  II. 

image  in  miniature  ot  the  change.  Do  not 
misunderstand  me.  The  wealth  of  the  country 
as  a  whole  has  increased  beyond  the  dreams  of 
avarice;  but  where  has  this  increase  gone?  If 
you  want  an  answer  it  is  flaunted  before  your 
very  eyes  by  what  now  are  the  homes  of 
Englishmen.  Most  of  the  increase  has  gone 
in  a  mad  multiplication  of  castles  and  of 
mansions  hardly  less  pretentious.  You  will 
find  that  your  little  town  is  now  ringed  round  by 
these — by  thirty  new  great  flag-flying  castles, 
and  by  seventy  new  mansions — pillared  temples 
of  opulence.  Where  has  the  new  wealth  gone  ? 
Dwellings  such  as  these  will  answer  you.  It  is 
true  that  the  houses  described  by  you  as  tiled 
or  slated  are  still  in  good  repair.  Some  of  them 
perhaps  have  even  an  extra  storey;  and  by 
means  of  striped  blinds,  and  lace  curtains  in 
their  windows,  they  endeavour,  pathetically 
enough,  to  simulate  an  air  of  affluence ;  but 
these  houses  and  their  occupants — the  smaller 
professional  men,  and  a  handful  of  skilled 
wage-earners — in  point  of  number  do  no  more 
than  hold  their  own;  whilst  the  mass  of  the 
population — five-sixths  of  the  whole — have,  as 
their  houses  will  show  you,  gained  nothing. 
They  have  lost.  They  are  still  under  the  same 
thatch,  but  the  thatch  has  been  left  to  rot,  and 
now  gives  to  the  place  the  aspect  of  one  great 
dunghill.  You  must  be  prepared,  in  short,  for 
an  unexampled  and  appalling  spectacle — a 
I'ollection  of  human  dwellings  which  is  fissured 
into  two  extremes — unnatural  superwealth 


Chap.  II.]  HOUSES  IN   1911  67 

crowded  and  glittering  on  the  slopes,  and  a 
mass  of  unalleviated  squalor  festering  under 
straw  below." 

With  these  ominous  words  in  his  ears,  the 
awakened  sleeper  starts  on  his  way  to  verify 
them.  The  outskirts  of  the  town  are  reached. 
He  cannot  have  missed  his  way;  for  here,  seen 
through  an  avenue,  is  the  castle — then  the  only 
one — which  had  caught  his  attention  or  existed 
at  the  time  of  his  first  visit.  But  where  are  the 
thirty  new  ones,  which  now  crown  the  hills  in  a 
circle,  and  indent  the  horizon  with  their  towers  ? 
He  can  see  the  opposite  heights,  but  no  sign  of 
a  castle  is  anywhere.  Presently  he  encounters 
an  elderly  man,  whom  he  addresses,  and  finds 
that  he  has  secured,  as  he  did  on  a  former 
occasion,  a  house-agent  and  surveyor  of  taxes 
for  his  informant. 

"  I  am,"  says  the  stranger,  practising  an 
innocent  deception,  "  looking  about  for  a  house 
here.  It  might  be  large — something  like  this 
castle.  It  might  be  of  moderate  size,  worth, 
say,  from  £100  to  £200  a  year.  But  one  thing- 
it  must  be — it  must  be  modern — built  at  all 
events  since  the  beginning  of  the  nineteenth 
century.  You've  thirty  new  castles — that's 
what  a  friend  tells  me;  so  the  chances  are  you 
could  find  me  something  suitable  in  your 
books." 

"  I  don't  know,  sir,"  says  the  agent,  "  who 
may  have  been  telling  you  tales,  but  I've  been 
in  the  house  business  here  for  more  than  fift 
years.     My  father  was  in  the  same  line  before 


68  HOUSES   1M    1911  [Book  I!. 

me,  and  his  father  before  him  :  so  I  ought  to 
know  what  I'm  talking  about.  This  castle  of 
Sir  John's  was  reconstructed  in  the  year  1799, 
and  since  that  time — a  matter  of  a  hundred  and 
ten  years — the  number  of  houses  that  have  been 
built  of  the  same  class — what  do  you  think  it 
is?  It's  one,  sir,  no  more  than  one.  That's 
been  built  by  a  gentleman  from  South  Africa, 
and  he  only  moved  into  it  a  couple  of  months 
ago." 

"  I  may,"  says  the  stranger,  "  have  mistaken 
my  friend's  meaning.  I  certainly  understood 
him  to  speak  of  a  great  multiplication  of  castles, 
occupied  by  families  with  more  than  ,£5,000  a 
year;  but  he  may  merely  have  meant  what  I 
suppose  you  would  call  large  mansions,  with 
accommodation,  say,  for  from  eight  to  a  dozen 
servants.  If  you've  only  one  new  castle,  the 
number  of  new  mansions  must  be  very  nearly 
a  hundred." 

The  agent  smiles,  and  makes  a  calculation  on 
his  ringers.  "  Of  such  residences,"  he  replies, 
"  eleven  would  be  no  good  to  you.  You'd 
think  them  much  too  old.  As  you  might  see 
for  yourself  from  an  old  plan  in  my  office,  they 
were  standing  twenty  years  before  the  battle  of 
Waterloo." 

"  Yes,  yes,"  says  the  stranger :  "  I  believe 
you  about  the  eleven  old  ones.  What  I  want 
to  hear  about  is  the  hundred  or  so  which  must 
be  new.  Whereabouts  are  they  situated  ?  " 

"  You  can,"  the  agent  replies,  "  if  you  look 
between  those  two  elm  trees,  see  four  of  them 


Chap.  II.]  HOUSES  IN  1911  69 

for  yourself — white  houses  with  pillars,  stand- 
ing on  the  hill  opposite.  You  can  tell  the  dates 
of  them  by  their  names.  The  lower  one  on  the 
left  is  '  The  Pavilion/  so  called  after  '  The 
Pavilion '  of  the  Prince  Regent.  To  the  right 
of  that  is  '  St.  Albert's/  called  after  the  Prince 
Consort.  The  gilt  ornament,  six  feet  in 
height,  on  the  portico,  is  a  copy  of  the  Albert 
Memorial.  Of  the  two  top  houses,  the  one 
to  the  right  is  '  Beaconsfield/  The  newest 
of  all — the  one  to  the  right — is  Edwardstown— 
classical  outside,  inside  Jacobean,  with  smoked 
oak  panelling,  and  called  after  his  late  Majesty. 
You  were  speaking  just  now  of  a  hundred  new 
houses  or  thereabouts.  Well,  sir,  let  me  tell 
you  this.  Not  a  single  new  house,  lying  within 
the  limits  you  mention,  has  been  built  here, 
except  those  four,  since  the  year  1801." 

The  stranger  is  silent  with  surprise.  Pre- 
sently the  agent,  as  if  a  fresh  thought  had  struck 
him,  begins  again. 

"  It  has,"  he  says,  "  been  just  occurring  to 
me,  sir,  that  the  explanation  of  your  little 
mistake  may  be  this.  There  are  new  houses 
here,  different  from  those  yonder — very  genteel 
residences,  but  on  an  altogether  smaller  scale — 
most  of  them  costing  you  ^30  a  year,  a  few  of 
them  up  to  ninety,  many  not  more  than  twenty ; 
and  many  of  these  call  themselves  by  fancy 
names — the  names  of  castles  like  Walmer, 
Dunrobin,  Alnwick,  or  of  big  places  like  Sand- 
ringham,  Welbeck,  Clumber;  and  these  names 
may  have  misled  you.  That  would  account  for 


70  SLATES  AND  THATCH  [Book  II. 

everything.  Of  new  houses  of  this  kind  there 
are  nearer  two  hundred  than  one — every  one  of 
them  built  since  the  days  when  my  father  was 
a  boy — nice  places,  not  inside  the  town,  but 
ranged  all  round  it  at  just  a  convenient  distance. 
I  ought  to  mention  that  they  have  small  accom- 
modation for  servants — none  for  more  than 
three,  most  for  not  more  than  one ;  but  if  a  house 
of  this  description  would  suit  you  otherwise  for 
a  month  or  two — why,  your  servants  could  get 
capital  lodgings  in  almost  any  of  the  streets 
close  by." 

"  I'm  afraid,"  the  stranger  replies,  "  that 
plan  would  hardly  work.  I'm  sorry  to  say 
anything  derogatory  of  your  native  place,  but 
I  think  you'll  admit  that  I'm  not  wrong  as  to 
one  thing.  The  houses  in  the  town  itself,  with 
the  exception  of  a  few  like  your  own,  are  little 
better  than  so  many  thatched  hovels,  and  hardly 
a  penny  has  been  spent  on  them  for  the  last 
three  generations.  I  couldn't  ask  any  servant 
of  mine  to  lodge  in  a  thatched  dog-hole." 

'  Well,  sir,"  says  the  agent,  "  seeing's  better 
than  talking.  If  you'll  step  so  far  as  the  stile 
at  the  end  of  that  short  foot-path,  you  can  with 
your  own  eyes  see  the  whole  thing  in  a  nut- 
shell." The  stranger  goes  with  his  guide,  and 
the  promised  spectacle  is  before  him.  Except 
for  the  four  new  mansions  whose  porticoes  he 
has  seen  already,  and  the  raw  new  castle  of  the 
South  African  magnate,  the  higher  slopes 
remain  as  they  were  when  he  first  saw  them. 
Lower  down  is  a  novelty — a  circle  of  slated 


Chap.  II.]  SLATES   AND  THATCH  71 

villas,  forming  a  continuous  fringe  with  the 
body  of  the  town  enclosed  by  it.  This  is 
astonishing  enough — this  glittering  sign  that  a 
class  must  have  more  than  trebled  itself  which, 
according  to  his  friend,  the  reformer,  had  barely 
escaped  extinction ;  but  what  strikes  the  stranger 
dumb  is  the  body  of  the  town  itself.  Where  is 
the  mass  of  thatch,  which  must  now  be  sodden 
and  ruinous?  Where  is  the  great  expanse  of 
almost  unbroken  brown  ?  The  prevalent  colour 
of  the  town  is  now  not  brown,  but  red.  Except 
for  some  patches  of  slate,  it  seems  that  there 
are  tiles  everywhere.  It  is  only  after  he  has 
been  staring  for  many  minutes  in  silence,  that 
something  catches  his  eye  which  is  oddly 
familiar  to  his  memory — something  which  now 
suggests  to  him  an  incongruous  group  of  hay- 
ricks. It  is  the  sole  remnant  of  the  thatch 
which  he  remembers  as  all  but  universal.  This 
alone  remains  to  show  him  that  he  is  not 
dreaming. 

'  That,  sir,"  says  the  agent  at  last,  "  is 
different  from  what  you  expected.  And  yet 
you're  in  the  right  thus  far.  There  was  a 
time — I'm  speaking  of  the  beginning  of  the  last 
century — when  out  of  1,800  houses,  those  that 
were  thatched  numbered  1,530.  We  know  the 
figures  from  the  rate-books.  But  since  that 
time,  a  good  many  things  have  happened.  With 
the  exception  of  three  hundred,  every  one  of 
those  thatched  houses  has  been  pulled  down 
and  rebuilt — built  of  brick,  and  roofed,  as  you 
see,  with  tiles.  Some  of  them — about  three 


72  LOCAL   BUILDING   TRADE          [Book   II. 

hundred — are  a  bit  smaller  than  the  rest;  but 
in  each  of  these  last  there's  now  one  man  or 
two,  earning  twenty-five  or  twenty-six  shillings 
a  week,  whose  grandfathers  lived  under 
thatch,  and  were  lucky  if  they  earned  sixteen. 
Of  the  bigger  of  these  tiled  houses,  there's 
something  above  nine  hundred,  in  every  one  of 
which  there's  one  man  or  two,  as  may  be,  earn- 
ing anything  from  ^80  to  £i 60  a  year ;  whereas, 
if  you'll  only  believe  it,  in  1801  there  were, 
barring  the  gentry,  only  ninety  men  in  the  place 
earning  so  much  as  3O/-  a  week.  Lord  bless 
you,  sir,  if  these  things  happen  to  interest  you, 
you  may  take  again  the  case  of  those  smart  new 
slated  villas.  There's  hardly  a  family  living 
in  one  of  those,  whose  grandfathers  were  not 
born  and  brought  up  under  thatch  like  the  rest 
of  them.  There's  a  lot  of  new  money  been 
made  in  this  town  since  then.  Perhaps  your 
informant  didn't  take  that  into  account." 

"  On  the  contrary/'  says  the  stranger,  "  he 
did ;  and  he  told  me  that  the  kinds  of  people  to 
whom  the  new  money  went  could  be  seen  by  the 
different  classes  of  houses  it  was  used  to  build. 
He  told  me  as  a  known  fact  that  nearly  all  of 
this  new  money  was  used  in  building  big  castles 
and  so  forth,  and  that  nothing  was  left  for  the 
improvement  of  houses  of  any  other  kind." 

'  I  wish,  sir,"  says  the  agent,  "  you'd  only 
been  here  last  week,  and  had  heard  an  Address 
given  by  my  son-in-law — a  builder  himself— 
on  the  history  of  our  local  building  trade,  since 


Chap.  II.]      A  PICTORIAL  COMPARISON  73 

the  beginning  of  the  last  century.     He  showed, 
going  into  the  figures,  that  the  five  big  houses, 
inclusive  of  the  one  new  castle,  represented  a 
building  cost  of  about  ;£6o,ooo;  cost  of  170 
new    slated    villas,    ,£170,000;    ditto    of    900 
superior  dwellings  for  artizans,  ^360,000;  ditto 
of  300,  same  style  but  smaller,  ,£80,000.     Total 
for  all  new  houses,  ^"670,000.     Well,  sir,  if 
j£6o,ooo  amounts  to  nearly  all  of  ^670,000, 
the  party  who  gave  you  your  information  may 
be  right — not  otherwise.     Ask  him,  when  next 
you  see  him,  if  he'd  say  that  one-and-ninepence 
was  '  nearly  all '  of  a  pound.     I  don't  know 
who  the  gent  can  have  been,  unless  he  was  a 
wild-eyed  chap  who  came  here  a  year  ago  '  to 
inspect  conditions '  as  he  called  it.     He  spent 
three  hours  amongst  the  thatch,  gossiping  with 
a  lot  of  loafers;  and  when  somebody  proposed 
to  show  him  the  rest  of  the  town,  he  said  that 
the  thatch  and  the  loafers  were  the  only  things 
that  interested  him.     Anyhow,   whoever  your 
informant  was  or  was  not,  he  seems  to  have  got 
things  pretty  much  upside  down.     With  regard 
to  the  way  in  which  things  have  really  gone — 
with  regard  to  what  hasn't  happened,  likewise 
with  regard  to  what  has — his  meaning  is  only 
correct  if  you  take  it,  like  a  dream,  by  con- 
traries." 

If  this  illustration,  representing  in  rough 
pictorial  form  the  contrast  between  actual  facts 
and  the  versions  of  them  now  popular,  errs  at 
all,  it  errs,  so  far  as  it  ^oes,  in  representing  the 


74  A  PICTORIAL  COMPARISON       [Book  II. 

contrast  as  less  violent  than  it  is.  It  may, 
however,  be  objected  that  even  if  pictorially 
correct,  the  two  pictures  need  not  prove  what 
at  first  sight  they  appear  to  prove,  and  the 
grounds  on  which  this  objection  may  be  raised 
shall  be  considered  in  the  next  chapter. 


CHAPTER    III. 

THE  purpose  of  the  two  pictures  being  to 
exhibit  the  fallacy  of  the  idea  that  the  increas- 
ing wealth  of  this  country  has  been  mainly 
appropriated  by  the  rich,  it  may  be  objected  that 
the  manner  in  which  houses  of  different  kinds 
are  used  to  represent  incomes  between  certain 
limits  or  above  them,  is  so  loose  as  to  cover 
the  possibility  of  widely  different  results.  It 
may  thus  be  true  that  in  the  year  1801  such  a 
typical  town  would  have  contained  eleven 
substantial  houses  representing  incomes  between 
,£1,000  and  ^"5,000  a  year,  and  not  more  than 
fifteen  in  the  year  1910:  but  the  average  of 
such  incomes  may  have  been  smaller  at  the 
earlier  date  than  at  the  later.  It  may  have  been 
^2,000  in  one  case,  and  be  ,£3,500  in  the  other ; 
and  though  the  houses  may  have  increased  in 
number  by  little  more  than  a  third,  the  amount 
of  income  represented  by  them  may  have 
possibly  more  than  doubled  itself.  It  is,  how- 
ever, to  incomes  exceeding  ^"5,000  a  year  that 
this  contention  applies  with  the  greatest  force; 
for  here,  according  to  the  terms  ofthe  definition, 
there  is  no  upper  limit  whatsoever.  Thus  if  a 
castle  is  taken  to  represent  an  income  of  which 
nothing  is  stated  except  that  it  exceeds  this 
minimum,  our  typical  town  might  have  con- 
tained one  castle  at  one  time,  and  a  century 
later  might  have  contained  no  more  than  two; 

75 


/6  INCOMEvS  IN    1801  |Book  II 

but  the  old  castle  might  represent  an  income 
of  barely  ,£6,000  a  year,  and  the  new  one  an 
income  of  ;£  180,000.  The  number  of  castles 
would  not  have  been  more  than  doubled;  but 
the  income  represented  by  castles  would  have 
been  multiplied  by  more  than  thirty.  Hence, 
for  anything  that  our  pictures  show  to  the 
contrary  the  castles  might  have  robbed  the 
town,  if  not  to  the  extent  which  the  language 
of  reformers  suggests,  yet  at  all  events  to  an 
extent  which  renders  their  exaggerations 
excusable. 

In  such  objections  there  is  nothing  which  is 
a  priori  impossible.  Their  value  can  be  tested 
by  specific  evidence  only  :  and  with  regard  to 
the  most  important  of  them,  to  which  we  will 
here  confine  ourselves,  namely,  that  relating  to 
incomes  in  excess  of  ,£5,000,  we  happen  to  have 
evidence  which  is  exceptionally  direct  and 
ample.  The  official  report  on  the  income-tax 
of  1 80 1  enables  us  to  ascertain  with  very  fair 
exactitude,  not  only  what  was  then  their  num- 
ber— this  we  have  seen  already — but  also  their 
entire  amount.  Information  of  a  similar  kind 
is  now  available  with  regard  to  the  present  day, 
as  a  result  of  the  special  investigations  neces- 
sary in  connection  with  the  super-tax  to  which 
now  all  incomes  in  excess  of  ^"5,000  are  liable. 

Of  such  incomes,  in  the  year  1801,  so  far  as 
England  and  Wales  are  concerned,  the  average 
per  head  was  ,£9,970,  or  practically  ;£  10,000 
a  year;  and  the  number,  as  already  stated, 


Chap.  III.]      INCOMES  IN  1801  AND  1911  77 

having  been  about  1,100,  the  aggregate  amount 
of  the  whole  maybe  taken  as  about  £i  1,000,000. 

The  number  of  such  incomes  in  the  year 
1910,  as  disclosed  by  the  assessors  of  super-tax, 
was  approximately  11,000  in  respect  of  the 
United  Kingdom,  the  average  income  per  head 
being  ,£12,000  a  year;  and  the  aggregate 
amount  of  the  whole  was  £i  30,000,000. l 

Let  us  now  consider  what,  at  each  of  these 
two  dates,  was  the  aggregate  income  of  all 
classes  taken  together. 

From  the  income-tax  figures  for  1801  it  is 
directly  ascertainable  that,  out  of  a  total  popu- 
lation of  9,000,000  persons,  half  a  million,  or 
100,000  families,  subsisted  on  incomes  exceed- 
ing ;£i6o  a  year,  their  aggregate  income  being 
£60,000,000 ;  that  another  half  million  of 
persons  subsisted  on  incomes  lying  between 
,£160  a  year  and  ,£60,  their  aggregate  income 
being  ,£24,000,000;  and  that  the  rest  of  the 
population,  consisting  of  8,000,000  persons 
were  supported  by  about  3,700,000  workers, 
none  of  them  earning  as  much  as  22/-  a  week. 
Of  these  last,  a  third  must  have  been  women, 
boys  and  girls,  who  cannot  have  earned  between 
them  more  than  ,£13,000,000.  Of  the  re- 
mainder, consisting  of  two  and  a  half  million 

i.  It  appears,  from  supplementary  information  issued 
whilst  these  pages  were  in  the  press,  that  the  total  was 
about  3^  per  cent,  in  excess  of  the  sum  above  stated.  This 
fact,  however,  does  not  substantially  alter  the  general 
conclusion  given  in  the  text. 


78  THE  NATIONAL  INCOME          [Book  II. 

men,  one  million  were  workers  engaged  in,  or 
connected  with,  agriculture,  who  cannot  have 
earned  between  them  more  than  £2 6, 000,000  ;* 
whilst  the  remainder — men,  who,  apart  from  the 
specially  skilled  artizans,  represented  the  mass 
of  labour  other  than  agricultural — even  if  we 
assume  them  to  have  received  on  an  average 
as  much  as  ^40  a  head,  could  not  have  earned 
between  them  more  than  ^56,000,000.  In 
other  words,  we  shall  be  appreciably  over  the 
mark,  but  sufficiently  near  it  for  the  purpose  of 
a  broad  comparison,  if  we  assume  that  the 
income  of  England  and  Wales  at  the  beginning 
of  the  nineteenth  century  amounted  to  as  much 
as  ^180,000,000. 

The  national  income  to-day,  when  considered 
for  statistical  purposes,  is  commonly  taken  to 
mean  the  income  of  the  United  Kingdom.  The 
question  of  its  amount  has  been  approached  in 
various  ways;  but  for  several  years  there  has 
been  a  general  consensus  of  opinion  that  it 
could  not  be  less  than  two  thousand  million 
pounds;  whilst  an  elaborate  volume,2  which 
throws  much  new  light  on  the  matter,  and  was 
issued  by  the  Board  of  Trade  in  1912,  leads 
to  the  conclusion  that  it  considerably  exceeds 

i.  The  average  earnings  of  an  agricultural  labourer  at 
the  beginning  of  the  nineteenth  century  were  commonly 
computed  to  be  not  more  than  ^21  a  year.  As  supple- 
mented by  payments  out  of  the  rates  they  may  possibly 
have  reached  the  sum  mentioned  above. 

3.  The  Final  Report  in  the  Census  of  Production  for  the 
year  1907. 


Chap.  III.]     THE  RICHES  OF  THE  RICH  79 

that  sum.  If  we  wish  to  adhere  to  the  letter 
of  our  previous  comparison,  and  deal  in  both 
cases  with  England  and  Wales  only,  a  deduc- 
tion would  have  to  be  made  in  respect  of 
Scotland  and  Ireland.  Since,  however,  the 
question  now  before  us  relates  to  proportions 
rather  than  to  absolute  amounts,  our  figures 
will  be  simplified,  and  our  comparison  will  be 
practically  unaffected,  if,  as  regards  the  present, 
we  deal  with  the  United  Kingdom,  and,  as 
regards  the  earlier  period,  with  England  and 
Wales  only. 

To  begin,  then,  with  a  comparison  of  the 
broadest  kind,  the  outstanding  facts  and  figures 
which  call  for  our  consideration  are  these. 

In  the  year  1801,  of  the  class  of  persons 
whose  incomes  exceed  ,£5,000  a  year — the  class 
specially  meant  by  reformers  when  they  declaim 
about  the  riches  of  the  rich — the  average  income 
per  head  was  ,£10,000  a  year;  the  number  of 
such  persons  was  1,100;  their  aggregate  income 
was  £  1 1,000,000 ;  and  the  income  of  the  nation 
was  ;£  1 80,000,000. 

At  the  present  time,1  of  the  same  class  of 
persons,  the  average  income  is  £  12,000;  the 
number  of  such  persons  is  11,000;  their  aggre- 
gate income  is  but  slightly  in  excess  of 
^130,000,000,  and  the  income  of  the  nation 
is  in  excess  of  £2, 000,000,000. 

Now  if  these  figures  should  be  examined  by 
any  one  who  entertains  the  idea  that  an  increas- 

x.  This  phrase  refers  throughout  to  the  year  1910. 


8o  THE  RICHES  OF  THE  RICH      [Book  II. 

ing  proportion  of  the  income  of  this  country  is 
being  appropriated  by  the  rich,  the  result  of 
which  process  is  a  constant  increase  of  poverty, 
two  facts  may  be  deduced  from  them  which 
might  seem,  if  quoted  on  a  platform,  to  favour 
such  a  conclusion.  In  the  first  place  the 
average  income  of  the  persons  here  in  question 
has  risen  from  about  ,£10,000  to  ;£  12,000  a 
year — an  increase  of  20  per  cent.  In  the 
second  place,  whilst,  at  the  beginning  of  the 
nineteenth  century  there  was,  in  England  and 
Wales,  one  of  such  incomes  to  every  9,000 
inhabitants,  there  is  at  the  present  time  in  the 
United  Kingdom  one  of  such  incomes  to  every 
4,100  inhabitants. 

Taken  by  themselves,  however,  facts  such  as 
these  prove  nothing.  The  nation  may  be  com- 
pared to  an  individual  who  carries  his  income 
in  his  pocket,  and  the  rich  to  a  thief  who 
abstracts  from  it  a  certain  number  of  sovereigns. 
The  extent  to  which  the  victim  is  impoverished, 
or  even  appreciably  inconvenienced,  does  not 
depend  on  the  amount  of  the  theft  alone.  It 
depends  also  on  the  amount  from  which  the 
theft  is  made.  Other  things  being  equal,  the 
inconvenience  experienced  by  the  victim  if  £2 
be  taken  from  £20  will  in  all  probability  be 
less,  it  will  certainly  not  be  greater,  than  it 
would  have  been  had  £i  been  taken  from  £10. 

Similarly,  with  regard  to  the  income  which, 
if  we  like  to  put  it  so,  is  stolen  by  the  rich  from 
the  income  of  the  community  at  large,  the 
practical  question  for  the  community  at  any 


Chap.  III.]      AGGREGATE  OF  INCOMES  Si 

particular  period  is,  what  is  the  proportion  of 
the  abstraction  to  the  total  from  which  it  is 
abstracted?  If  we  re-examine  our  figures  with 
this  consideration  in  view,  the  result  will  be 
remarkable,  and  to  many  people  surprising. 
iThe  income  of  England  and  Wales  having 
been  j£  180,000,000  in  1801,  the  aggregate  of 
incomes  exceeding  ,£5,000  a  year — namely 
;£i  1,000,000,  will  have  amounted  to  6' 3  per 
cent,  of  the  whole.  The  income  of  the  United 
Kingdom  being  at  the  present  time  more  than 
;£  2, 000,000,000,  the  aggregate  of  incomes 
exceeding  ,£5,000  is  a  sum  which  relatively  to 
the  whole  is  certainly  not  greater  but  probably 
a  trifle  smaller.  Our  information,  however,  is 
not  sufficiently  precise  to  justify  us  in  insisting 
on  the  difference  between  these  two  fractions. 
For  argument's  sake,  they  may  be  here  taken 
as  identical.  It  is  enough  for  the  moment  to 
insist  on  the  broad  fact,  which  definite  evidence 
places  beyond  all  doubt,  that  the  aggregate 
income  of  "  the  rich,"  despite  its  huge  absolute 
increase,  has,  relatively  to  the  income  of  the 
country  as  a  whole,  not  undergone  any  increase 
whatsoever,  but,  singular  as  the  fact  may  seem, 
is  substantially  the  same  to-day  as  it  was  a 
century,  or  more  than  a  century,  ago. 

Thus  far,  however,  the  figures  bearing  on  the 
case  have  been  taken  at  their  "  face  value/' 
Certain  considerations  have  been  omitted  to 
which  due  weight  must  be  given  before  even  a 
general  conclusion  can  be  presented  in  its  final 
form. 


82  PROFITS  AND  WAGES  [Book  II. 

In  most  cases  when  attention  is  called  to  the 
magnitude  of  the  income  of  the  rich,  however 
"  the  rich  "  may  be  defined,  the  special  object 
in  view  is  a  comparison  of  their  aggregate 
income  with  the  aggregate  income  of  the  multi- 
tude commonly  called  "  the  poor,"  or  of  the 
"  employed  "  as  opposed  to  the  employers,  or 
of  the  "  labourers  "  as  opposed  to  the  "  capi- 
talists "  or  the  "  takers  of  profits."  Now, 
except  in  the  case  of  certain  professional 
earnings,  such  as  those  of  a  lawyer  or  a  doctor, 
it  is  obvious  that  whenever  any  large  income  is 
produced,  the  employment  of  labour  is  a 
necessary  part  of  the  process ;  that  the  labourers, 
in  order  to  live,  must  be  paid  wages  of  some 
sort;  and  that  profits,  however  large,  are  merely 
part  of  a  total,  larger  still,  of  which  wages 
constitute  the  remainder.  There  are  no  persons 
who,  as  the  result  of  their  own  logic,  are  bound 
to  insist  on  this  fact  more  forcibly  than  socialists. 
To  admit  that  profits  can  exist  which  have  no 
wage-bill  as  their  concomitant,  would  be  to  admit 
that  wealth  can  be  produced  without  any  labour 
at  all.  If  any  English  employer  sought  to 
maintain  this  position  on  the  ground  that  he 
had  recently  transferred  his  works  to  France, 
and  no  longer  paid  any  wages  to  Englishmen, 
socialists  would  be  the  first  to  inform  him  that 
he  had  no  more  altered  the  situation  than  he 
would  have  done  if,  his  works  having  been 
situated  originally  on  the  English  bank  of  the 
Tweed,  he  had  re-erected  them  in  an  opposite 
field  in  Scotland,  so  that  his  labourers  now 


Chap.  III.]          PROFITS  AND   WAGES  83 

lived  at  the  Scotch  end  of  a  bridge,  whilst  he 
himself  lived  on,  and  received  his  profits,  at  the 
English  end.  His  profits  would  still  be  one 
part  of  a  total  business  income  of  which  his 
labourers  would  receive  another,  whether  he 
and  they  were  divided  by  a  stream  of  water 
or  no. 

Now  the  kind  of  case  here  indicated,  of  an 
employer  living  in  this  country  and  his  labourers 
living  in  another,  is  so  far  from  being  imaginary 
that  it  has  a  most  important  bearing  on  all 
current  computations  of  the  income  of  the 
United  Kingdom  to-day.  Of  that  income,  as 
commonly  computed  by  statisticians,  a  con- 
siderable portion  consists  of  profits  arising  from 
enterprises  the  seat  of  which  is  not  in  this 
country,  but  abroad;  and  the  labour  employed 
in  which  is  not  home  labour,  but  foreign. 

In  all  cases  other  than  these,  the  total  value 
produced  by  any  business  or  industry,  however 
it  may  be  divided  into  profits  and  the  wages  of 
those  employed,  is  duly  included  by  statisticians 
in  their  estimates  of  the  income  of  the  nation. 
Let  us,  for  example,  imagine  two  brothers  living 
at  Dover,  each  of  whom  has  a  factory  situated 
in  that  town.  The  annual  product  of  each  is 
equal  to  ,£20,000,  of  which  £10,000  is  profits, 
and  ,£10,000  is  wages.  In  any  statement  of 
the  income  of  this  country,  the  united  profits  of 
these  brother  employers  would  appear  as 
;£2O,ooo  on  the  profit  side  of  the  entries,  and 
the  wages  paid  by  them  as  ,£20,000  on  the 
wages  side.  The  statistical  statement  would 


84  AN   EXAMPLE  [Book  II. 

be  so  far  complete.  The  two  sums  would  be 
comparable,  and  the  result  we  should  get  by 
comparing  them — that  profits  and  wages  were 
halves  of  the  same  total — would  be  correct. 

But  if,  of  the  two  factories  owned  by  these 
Kentish  brothers,  one  happens  to  be  situated, 
not  at  Dover  but  at  Calais,  and  the  labourers 
employed   by  its  owner  are   not   English  but 
French,  the  profits  of  the  brothers  and  the  total 
of  the  wages  paid  by  them,  will  be  in  this  case 
precisely  what  they  were  in  the  other ;  but  they 
would    not,    according    to    current    statistical 
methods,  be  so  entered  in  any  statement  of  the 
income  of  the  United  Kingdom.     The  united 
profits  of  the  brothers  would  still  continue  to 
figure  as  ,£20,000  in  the  aggregate  income  of 
the  employers,  but  of  the  wages  corresponding 
to  these  profits,  and  still  actually  equal  to  them, 
one  half,  because  it  was  paid  on  the  opposite 
side  of  the   Channel,  would  vanish  from  our 
insular  records  of  the  aggregate  income  of  the 
employed,  and  only  the  other  half,  still  paid  at 
Dover,  would  remain.     We  should  still  have 
,£20,000  on  the  profit  side  of  the  entries,  but  on 
the    wages    side,    only    ,£10,000    instead    of 
j£2O,ooo  to  correspond  to  it.     Hence,  if  these 
entries  were  taken  as  indicating  the  actual  ratio 
of  the  income  of  employers  in  this  country  to 
the   income  of  those   employed  by  them,   the 
conclusion  thus  reached  would,  it  is  sufficiently 
obvious,  be  either  absurdly  misleading,  or  in  its 
very    nature    impossible.     We    should    either 
have  to  believe,  in  respect  of  these  two  busi- 


Chap.  III.]       PROFITS  FROM  ABROAD  85 

nesses,  that  wage-rates  were  50  per  cent,  below 
the  prevailing  level,  or  else  that  one  of  them, 
though  no  less  lucrative  than  the  other,  had 
managed  to  dispense  with  wages,  or  in  other 
words  with  labour,  altogether.  In  order  to 
render  our  insular  records  such  that  any  true 
comparison  between  profits  and  wages  might  be 
based  on  them,  it  is  clear  that  we  should  have 
to  do  one  or  other  of  two  things.  We  should 
have  to  strike  out  the  profits  of  the  factory  at 
Calais  from  our  profit-income,  or  else  add  the 
wages  paid  to  the  labourers  at  Calais  to  our 
wage-income. 

These  observations  apply,  it  is  needless  to 
say,  to  the  whole  of  that  portion  of  the  income 
of  this  country  which  appears  in  statistical 
statements  as  '  profits  coming  from  abroad/' 
and  if  our  object  is  to  compare  one  group  of 
insular  incomes  with  another,  either  all  profits 
from  abroad  must  be  eliminated  as  having  no 
wages  to  correspond  to  them,  or  the  corres- 
ponding wages,  which  are  paid  abroad,  must 
be  included.  The  former  method  is  the  sim- 
plest; and  we  will  now  apply  it  to  the  totals, 
as  already  given,  of  incomes  exceeding  ^5,000, 
in  the  year  1801  and  at  the  present  time 
respectively.  What,  then,  is  the  amount  which, 
on  account  of  profits  from  abroad,  must  in  each 
case  be  deducted  from  /"  11,000,000  in  the  first 
case,  and  from  ,£130,000,000  in  the  second? 

If  we  make  the  assumption,  which  at  any  rate 
is  broadly  true,  that  the  bulk  of  profits  is 
included,  no  matter  what  their  origin,  in  the 


86  HOME  AND  FOREIGN  PROFITS    [Book  II. 

aggregate  of  such  incomes  as  are  now  subject 
to  income-tax — namely  those  exceeding  ;£i6o 
a  year,  and  if  we  assume  farther  (which  is  all 
that  can  be  done  here)  that  the  distribution  of 
the  foreign  element  amongst  all  such  incomes 
is  equal,  an  answer  sufficiently  accurate  for  our 
present  purpose  is  obtainable.  At  the  begin- 
ning of  the  nineteenth  century,  according  to  the 
then  recent  estimate  of  Pitt,  out  of  every  pound 
of  income  which  would  now  be  subject  to 
income-tax,  profits  from  abroad — mainly  from 
the  West  Indies — amounted  to  no  more  than 
sevenpence.  At  the  present  time,  according  to 
the  latest  information,  out  of  every  such  pound 
they  amount  to  at  least  five  shillings.  What, 
then,  we  shall  have  to  deduct  from  the  two  sums 
here  in  question  will  be  sevenpence  in  the  pound 
from  ,£11,000,000  for  the  year  1801,  and  five 
shillings  in  the  pound  from  ^"130,000,000,  in 
respect  of  the  present  time. 

The  result  will  be  that  whereas,  taken  in  its 
integrity,  the  total  has  increased  in  the  ratio  of 
one  to  twelve,  the  home-produced  portion  has 
increased  in  a  ratio  of  only  one  to  nine.  Hence 
if  the  gross  total,  relatively  to  the  income  of  the 
nation,  is,  as  we  have  seen,  no  greater  to-day 
than  it  was  more  than  a  century  ago,  it  is  plain 
that  the  home-produced  portion  of  it  will  be 
now  considerably  smaller.  It  will  have 
amounted,  at  the  beginning  of  the  nineteenth 
century,  to  fifteen  pence  out  of  every  pound  of 
the  home-produced  income  of  the  nation.  It 


Chap.  III.]  A  DELUSION  87 

will  amount  at  the  present  time,  as  nearly  as 
possible,  to  a  shilling.  It  must  farther  be  noted 
that  the  home-produced  income  of  the  nation 
would,  if  divided  equally  in  1801,  have  yielded 
an  average  income  of  less  than  £20  per  inhabi- 
tant. It  would  yield,  if  similarly  divided,  more 
than  twice  that  amount  to-day.  The  effect, 
therefore,  in  1801  of  "the  abstractions  of  the 
rich,"  on  the  average  share  per  person,  would 
have  been  a  loss  of  fifteen  pence  in  the  pound 
out  of  £19  155.  It  would  be  a  loss  of  only  a 
shilling  in  the  pound  out  of  £  45  to-day. 

It  is  needless,  at  the  present  stage  of  our 
enquiry,  to  labour  these  details  farther.  Prac- 
tically the  object  with  which  they  have  been  set 
forth,  is  that  of  elucidating  one  broad  conclu- 
sion, namely  this  : — that  the  primary  idea  or 
thesis  with  which  social  reformers  start,  which 
is  the  foundation  of  all  their  projects  of  reform, 
and  is  the  key  to  their  interpretation  of  the 
conditions  which  require  to  be  reformed,  is 
altogether  a  delusion.  Their  primary  thesis  is 
that  all  the  social  evils  of  to-day,  as  contrasted 
with  those  of  yesterday,  are  due  in  the  last 
resort  to  the  ever-increasing  proportion  which 
is  being  taken  from  the  income  of  the  community 
in  order  that  it  may  be  added  to  "  the  piled  up 
aggregations  "  of  a  class  to  whose  present  riches 
the  past  affords  no  parallel;  and  all  their  pro- 
jects of  reform  are  reducible  to  some  device  or 
other  by  which  the  reservoirs  of  this  class, 
supposed  to  be  inexhaustible,  may  be  tapped, 


88  A  FALLACY  EXPOSED  [Book  II. 

and  their  contents  administered  in  doses  to  the 
mass  of  the  population  generally.  If  there  are 
any  persons  to  whom  the  language  of  reformers 
is  applicable  when  they  declaim  in  this  manner 
about  the  all-engrossing  modern  rich,  these 
persons  must  be  all  comprised  in  the  class  whose 
incomes,  to  say  the  least  of  them,  exceed  ,£5,000 
a  year;  and  the  broad  conclusion  here  placed 
before  the  reader  is  that  the  wealth  of  the 
typically  rich  class,  relatively  to  the  wealth 
distributed  amongst  the  population  generally, 
is  a  quantity  which,  instead  of  increasing,  has 
for  more  than  a  hundred  years  been  actually 
growing  less  and  less;  and  that  all  those  ideas 
as  to  modern  poverty  and  reform,  which  have 
the  contrary  opinion  as  their  basis,  must  be 
altogether  readjusted. 

The  case  of  the  lesser  rich  will,  with  similar 
results,  be  considered  in  a  future  chapter,  when 
the  analysis  of  the  income  of  the  nation  can  be 
presented  in  greater  detail.  For  the  moment 
it  will  be  enough  to  observe  that  the  moral 
suggested  by  our  pictures  of  the  same  typical 
town,  as  to  the  actual  diffusion  of  wealth  in 
contrast  to  its  supposed  concentration,  errs,  if 
it  errs  at  all,  not  by  overstating  but  by  under- 
stating realities. 

At  the  same  time  it  must  be  admitted  that 
the  fallacy  here  exposed  is  by  no  means  peculiar 
to  the  reformers  who  specialise  in  the  trade  of 
disseminating-  it.  It  represents  an  opinion 
which  is  more  or  less  vaguely  held  by  a  very 


Chap.  III.)         A  FALLACY  EXPOSED  89 

large  number  of  otherwise  cautious  persons, 
and  this  opinion  being  diametrically  opposed 
to  facts,  a  delusion  so  widely  spread  must  have 
some  cause  or  causes  of  an  important  and 
discoverable  kind.  In  the  following  chapter 
these  causes,  of  which  there  are  several,  will  be 
surveyed. 


CHAPTER    IV. 

ONE  of  the  reasons  why  the  total  wealth  of  the 
rich  may  seem  to  have  increased  relatively  to 
the  total  wealth  of  the  country,  whereas  in 
reality  it  has  not  increased  but  declined,  is  no 
doubt  the  fact  that  the  number  of  rich  in- 
dividuals has  increased  in  relation  to  the 
number,  though  not  to  the  income  of  the 
population.  The  actual  number  of  the  rich, 
however,  has  always  been  so  small  that  a 
relative  increase  of  this  particular  kind  would, 
if  it  stood  by  itself,  be  even  now  not  very 
conspicuous,  being  equivalent  to  no  more  than 
an  addition,  in  the  course  of  a  century,  of  one 
rich  household  to  every  eighteen  hundred 
houses. 

But  there  is  another  standard  of  measure- 
ment, taken  in  relation  to  which  the  increase  of 
the  rich  has  been  enormous,  not  only  in  respect 
of  their  number,  but  of  their  aggregate  income 
also.  This  standard  consists  of  the  geogra- 
phical area  of  the  country,  which,  unlike  the 
population,  and  unlike  wealth  in  general, 
instead  of  increasing,  always  remains  the  same. 
To  put  the  matter  roughly,  if  we  imagine  the 
country  to  be  divided  into  eleven  hundred 
parishes  all  of  equal  size,  whereas  there  would 
at  the  beginning  of  the  nineteenth  century  have 
been  only  one  person  in  each  with  more  than 
^5,000  a  year,  there  would  be  at  least  ten 


Chap.  IV.]    CAUSES  OF  MISCONCEPTION  91 

to-day;  and  if  the  whole  of  each  parish  had 
been  visible  from  its  own  church  steeple,  any 
observer,  on  whatever  steeple  he  perched  him- 
self, would  to-day  see  at  a  glance  ten  times  as 
many  great  houses  as  he  would  have  seen  had 
he  lived  in  the  days  of  his  great-grandfather. 
If  from  such  a  spectacle,  repeated  wherever  he 
went,  he  derived  the  impression  that  the  rich 
were  fast  getting  hold  of  everything,  the 
impression  would  be  natural  enough;  but  how 
widely  at  variance  such  appearances  may  be 
with  realities,  can  be  seen  by  considering  an 
analogy,  which  relates  not  to  wealth  but  health. 
Let  us  suppose  that  a  tropical  island,  pre- 
viously unoccupied,  is  one  day  discovered  to 
be  astonishingly  rich  in  rubber.  An  enormous 
influx  of  settlers  is  thereupon  expected,  and  a 
town  is  rapidly  built  which  will  accommodate 
twenty  thousand  persons.  The  climate,  how- 
ever, proves  to  be  so  pestilential  that  only  one 
thousand  persons  can  be  induced  to  remain  and 
brave  it;  and  amongst  these  thousand  the 
annual  death  rate  is  100 — nearly  six  times  as 
great  as  the  death-rate  of  the  United  Kingdom. 
Let  us  now  suppose  that  science  discovers  a 
means  by  which  the  pestilent  air  is  purified. 
The  terrors  of  the  climate  disappear.  Colonists 
arrive  in  the  number  at  first  anticipated.  The 
fever-stricken  and  almost  empty  town  soon  has 
its  full  population  of  twenty,  instead  of  a 
single,  thousand,  and  the  annual  death-rate 
falls  from  100  per  1,000  to  15 — a  rate  lower 
than  that  of  any  country  in  Europe.  Neverthe- 


92  GEOGRAPHICAL  DISTRIBUTION    [Book  II. 

less,  if  bereaved  persons  were  accustomed  to 
wear  black  for  a  year,  any  one  who  visited  this 
town  now,  which  has  been  transformed  from  the 
unhealthiest  into  one  of  the  healthiest  in  the 
world,  would  encounter  in  a  tour  of  its  streets 
three  hundred  persons  in  mourning,  whereas  he 
would  have  encountered  no  more  than  a 
hundred  in  the  old  days  when  each  of  these 
streets  was  a  death-trap,  and  one  man  out  of 
every  ten  to  be  met  in  them  would  have  had  but 
twelve  months  to  live.  As  a  spectacle  appeal- 
ing to  the  eye,  the  signs  of  death  would  have 
been  multiplied;  but  the  ravages  of  death,  as 
actually  experienced  by  the  population,  would 
from  a  ghastly  maximum  have  been  reduced  to 
an  abnormal  minimum.  The  reduction  would, 
it  is  obvious,  be  the  one  vital  fact.  The  specta- 
cular increase  would  be  illusory,  because 
altogether  irrelevant. 

Similarly,  with  regard  to  the  rich  in  the 
United  Kingdom,  their  aggregate  wealth  has 
increased,  and  increased  in  a  visible  way,  if 
measured  by  its  average  amount  per  square 
mile  of  the  national  area.  It  has,  at  the  same 
time,  decreased  rather  than  increased,  if 
expressed  as  so  many  pence  per  pound  of  the 
national  income.  This  decrease,  or  at  all  events 
this  failure  to  increase,  is  the  sole  relevant, 
indeed  the  sole  actual  fact,  so  far  as  the  wealth 
or  the  poverty  of  the  mass  of  the  population  is 
concerned.  The  increase,  which  shows  itself 
only  when  measured  by  an  irrelevant  standard, 
has,  when  considered  as  a  strictly  economic 


Chap.  IV.)        WEALTH   AND  POVERTY  93 

symptom,  no  meaning  whatsoever.  It  is 
nothing  but  an  optical  delusion. 

Nor  do  these  observations  apply  to  the  rich 
only.  An  optical  delusion  of  precisely  the 
same  kind  is  produced  in  the  case  of  the  con- 
spicuously poor  also.  In  London,  for  example, 
the  number  of  paupers  per  1,000  of  the  popula- 
tion might  to-day  be  only  half  of  what  it  was 
at  the  beginning  of  the  nineteenth  century ;  and 
yet  the  actual  number  now  living  within  walking 
distance  of  Hyde  Park  Corner,  would  have  so 
increased  that  the  crowd  of  unfortunates  would 
have  doubled  itself  who  could  be  mustered  in 
Hyde  Park  to  make  a  show  of  their  tatters. 

Optical  delusions,  however,  even  when  known 
to  be  such,  often  exert  an  influence  which  it  is 
hard  to  escape;  and  the  delusions  which  have 
just  been  noted  as  to  riches  and  extreme  poverty 
are  heightened  by  various  circumstances  the 
effect  of  which  on  the  imagination  is  cumulative. 

Though  of  incomes  exceeding  ,£5,000  a  year, 
the  average  income  per  head,  in  the  course  of 
more  than  a  century,  has  risen  only  from 
j£io,ooo  to  £i 2,000,  a  number  of  individual 
incomes  are  now  comprised  in  this  group  of  a 
magnitude  unknown  at  any  previous  period; 
and  the  imagination  of  the  superficial  observer 
is  often  so  affected  by  these  ultra-conspicuous 
fortunes  that  he  takes  them  to  be  representative 
for  the  precise  reason  that  they  are  exceptional. 
Here  we  have  the  origin  of  the  declaration, 
which  is  a  commonplace  amongst  modern 
reformers  from  the  Chancellor  of  the  Exchequer 


94  POVERTY  AND  WEALTH          [Book  II. 

downwards,  that  the  contrast  to-day  between 
wealth  and  extreme  poverty  is  greater  and  more 
menacing  than  it  ever  was  before.  And  in  a 
certain  sense  this  statement  is  true ;  but,  if  taken 
in  connection  with  the  issue  which  agitators 
intend  to  raise  it,  its  truth  is  completely  barren. 
If  poverty  be  represented  by  an  income  of  ten 
shillings  a  week,  there  is  a  greater  difference 
between  poverty  and  an  annual  income  of  five 
hundred  thousand  pounds,  than  there  is  between 
poverty  and  an  annual  income  of  fifty  thousand. 
But  if  the  riches  of  the  rich  be  regarded  as 
affecting  the  popular  welfare  in  the  sense  that, 
if  it  were  not  appropriated  by  a  small  number 
of  persons,  the  income  of  the  nation  in  general, 
and  of  the  poor  in  particular,  would  be  larger, 
the  incomes  of  these  persons  individually,  are 
a  matter  of  complete  indifference.  What  affects 
the  nation  at  large  is  the  total  amount  of  the 
"  theft,"  not  the  number  of  thieves,  or  the  share 
taken  by  each. 

The  fact,  however,  that  a  certain  number  of 
the  incomes  of  the  rich  to-day  are  enormous, 
cannot  be  entirely  disposed  of  by  the  above 
obvious  criticism.  This  may  be  seen  by  reflect- 
ing on  certain  of  the  results  that  would  ensue 
if  these  enormous  fortunes  disappeared,  and  all 
incomes  in  excess  of  /s,ooo  a  year,  whilst 
remaining  what  they  are  in  respect  of  their  total 
amount,  were  merely  raised  or  reduced  to  what 
is  their  present  average— in  other  words  to 
£ 1 2,000  a  year.  The  effects  of  this  change 
would  be  remarkable.  There  would  be  a 


Chap.  IV.]    EXPENDITURE  OF  THE  RICH  95 

sudden  cessation  of  nearly  all  the  proceedings 
with  which  wealth  in  the  imagination  of  the 
public  has  now  come  to  be  identified.  The 
sensational  prices  now  paid  for  pictures  and 
other  works  of  art  would  become  things  of  the 
past.  What  man  with  only  ,£12,000  a  year 
would  give  for  a  china  saucer  or  a  sucking-bottle 
of  rock  crystal  three  times  as  much  as  it  costs 
him  to  keep  three  sons  at  Eton?  Who  would 
spend  two  years'  income  on  pearls  for  his  wife's 
neck,  and  deprive  himself  for  two  years  of  the 
means  of  providing  her  with  a  new  petticoat? 
Who  would  give  three  years'  income  for  the 
pleasure  of  hanging  in  his  dining-room  a 
portrait  of  the  wife  or  the  grandmother  of  a 
total  stranger,  and  leave  himself  for  three  years 
without  the  price  of  a  dinner?  What  would 
become  of  all  the  great  entertainments  at  which 
singers  and  pianists  delight  unwillingly  silent 
companies  at  an  average  rate  of  ^"1,000  an 
hour?  Such  things  would  cease  to  be.  What 
would  become  of  the  yachts  of  six  hundred  tons 
and  more,  with  whose  size,  whose  beauty  and 
whose  movements  the  newspapers  to-day  render 
all  the  world  familiar?  Their  day  would  be 
over.  Nobody  would  be  rich  enough  to  keep 
one  of  them  in  commission  for  six  weeks.  The 
same  fate  would  overtake  the  only  hotels  which 
now  enjoy  any  special  reputation  for  luxury. 
They  would  have  either  to  close  their  doors 
or  entirely  change  their  character. 

It  is  true  that  hotels  of  this  class  are  few. 
So  are  great  yachts.     So  are  the  jewels,  the 


96  MISLEADING  IDEAS  [Book  II. 

pictures  and  other  works  of  art,  whose  prices  are 
counted  by  thousands  and  tens  of  thousands  of 
pounds.  So  are  the  great  entertainments  whose 
splendour  fills  the  newspapers.  The  great 
buyers  and  entertainers  are  exceedingly  few 
likewise.  Yet  if  these  features  of  to-day,  few 
as  they  are,  were  to  disappear  (as  they  would 
if  the  income  of  nobody  exceeded  ;£i  2,000)  the 
riches  of  the  rich  as  a  body  would  remain  as 
great  as  ever,  but  they  would,  so  far  as  the 
imagination  of  the  public  is  concerned,  seem  so 
to  have  dwindled  that  no  rich  men  were  left. 
Conversely,  if  things  having  been  reduced  to 
such  a  state  as  this,  were  once  again  to  become 
what  they  are  to-day — if  a  few  thousands  of 
incomes  fell  from  ;£  12,000  to  ^5,000,  and  a 
couple  of  hundred  rose  to  ,£60,000  or  more, 
fabulous  sales  of  gems  would  once  more  fill  the 
newspapers,  the  great  yachts  would  float  again, 
the  hotels  de  luxe  would  be  regilded;  and  the 
impression  produced  on  the  imagination  of  the 
public  would  be  irresistible  that  the  riches  of  the 
rich  were  being  swollen  to  a  magnitude  more 
vast  than  ever,  whereas  the  total  amount  had 
not  increased  by  a  halfpenny. 

Here,  then,  stated  briefly,  we  have  the  more 
general  causes  which,  whereas  in  actual  fact  the 
riches  of  the  rich,  relatively  to  the  wealth  of  the 
nation,  are  less  now  instead  of  greater  than  they 
were  at  the  beginning  of  the  nineteenth  century, 
combine  to  produce  a  delusion  that  the  case  has 
been  exactly  opposite.  But  to  these  general 
causes  another  remains  to  be  added,  of  a 


Chap.  IV.]  A  VAGUE  DELUSION  97 

different  kind,  and  incomparably  more  impor- 
tant. This  consists  of  the  specific  teaching  of 
reformers,  whether  socialists  or  extreme  radicals, 
whose  business  has  been  to  translate  a  more  or 
less  vague  delusion,  to  which  any  uninstructed 
person  may  be  liable,  into  a  body  of  statistical 
statements  which  affect  to  be  so  precise  that 
they  are  offered  to  the  public  as  the  basis  of  a 
definite  social  policy.  These  monstrous  and 
ludicrous  statements  shall  be  dealt  with  in  a 
separate  chapter. 


CHAPTER    V. 

Of  the  statements  just  referred  to  the  most 
comprehensive  and  most  characteristic  are  those 
which  relate  to  the  total  amount  of  the  national 
income  to-day,  and  the  manner  in  which  it  is 
distributed  amongst  various  classes  of  the  popu- 
lation. The  reader  shall  first  be  shown  by  an 
examination  of  one  of  the  most  recent  and  also 
one  of  the  most  favourable  examples  of  them, 
how  fallacious  these  statements  are  in  respect 
of  their  general  character.  We  will  then  deal 
more  minutely  with  each  of  their  more  important 
details. 

This  example  of  the  performances  of  modern 
reformers  as  statisticians  is  provided  by  a 
synopsis  of  the  national  income  and  its  distri- 
bution, which  has  been  issued  by  the  Fabian 
Society  as  a  trumpet-call  to  the  discontented. 
The  Fabian  Society,  its  avowed  object  being 
the  establishment  of  a  bureaucratic  socialism, 
claims  that  its  members  are  persons  of  high 
education  and  intellect,  and  are  by  no  means  to 
be  confounded  with  the  agitators  of  the  street 
corner.  Its  leading  spirit  is  Mr.  Sidney  Webb, 
who  is  honourably  known  as  an  historian  of 
certain  industrial  movements,  and  whose 
opinions  as  to  Poor-law  Reform  and  other 
kindred  questions  have  been  seriously  consulted 
by  many  who  have  no  sympathy  with  his 

98 


Chap.  V.]  THE   FABIAN   SOCIETY  99 

socialism.  Closely  associated  with  Mr.  Webb 
as  a  member  of  this  Society  is  Mr.  B.  Shaw, 
whose  triumphs  as  an  intellectual  dramatist  are 
sufficient  to  attest  that  his  talents  are  of  a  very 
unusual  order.  When,  therefore,  an  elaborate 
statement  as  to  a  question  of  the  first  importance 
is  issued  by  such  a  society  on  the  authority  of 
such  men  as  these,  we  may  assume  that  the 
statistical  ideas  which  reformers  now  seek  to 
popularise  are  being  presented  in  the  maturest 
form  with  which  the  knowledge  of  the  reformers 
can  invest  it. 

The  following  are  the  main  propositions 
contained  in  this  remarkable  document,  the 
figures  given  being  for  the  year  1905. 

The  total  income  of  this  country  is 
;£:, 920,000,000. 

Of  this  nearly  one  half,  or  ,£925,000,000, 
consists  of  incomes  exceeding  ,£160  a  year,  and 
is  thus  appropriated  by  the  rich  or  the  relatively 
rich. 

The  remainder — ^"99 5, 000,000 — represents 
the  income  of  the  poor,  and  is  made  up  mainly 
of  weekly  wages  or  salaries,  ^730,000,000 
being  the  earnings  of  industrial  labour,  and 
^265,000,000  being  the  earnings  of  a  miscel- 
laneous body  comprising  shop-assistants,  com- 
mercial clerks,  and  the  lower  ranks  of  the 
employees  of  the  State  and  Local  Authorities. 

It  would,  however,  the  Fabian  writer  con- 
tinues, be  incorrect  to  suppose  that  these  two 
sections  of  "  the  poor,"  perform  between  them 
the  whole  of  the  necessary  work  of  the  country 


ioo  THE  FABIAN   SOCIETY  [Book  II. 

There  is  a  certain  section  of  the  rich  or  the 
comparatively  rich — the  active  heads  and 
managers  of  productive  and  commercial  busi- 
nesses, professional  men  and  others — whose 
services  are  as  necessary  as  manual  labour 
itself,  and  who  earn  their  incomes  as  honestly 
as  any  manual  labourer.  But  how  much 
between  them  do  men  such  as  these  receive? 
Out  of  the  ,£925,000,000,  which  represents  the 
total  of  incomes  in  excess  of  .£160,  these  men 
receive  no  more  than  ^225,000,000.  And 
what  becomes  of  the  rest?  Here  we  are 
brought  to  the  astounding,  the  almost  incredible 
fact,  that  the  rest,  amounting  to  ^700,000,000— 
nearly  37  per  cent,  of  the  entire  income  of  the 
nation — is  appropriated  by  a  class  absolutely 
and  avowedly  idle,  comprising — here  the  writer 
is  very  precise — more  than  660,000  adult  males, 
not  one  of  whom  has  ever  "  pretended  to  have 
so  much  as  the  shadow  of  an  occupation." 
Here,  in  the  existence  of  this  multitude  of  "  the 
idle  rich,"  is  the  cause  of  all  those  evils  which 
it  is  the  mission  of  the  reformer  to  eradicate. 
Here,  reduced  to  scientifically  exact  propor- 
tions, is  the  fact  which  before  all  others  must 
be  burnt  into  the  reformer's  consciousness. 

It  is  claimed  on  behalf  of  these  figures  and 
statements  that  they  are  one  and  all  of  them 
based  on  specific  information  derived  mainly 
from  the  following  authoritative  sources;  the 
latest  Board  of  Trade  Reports  on  the  various 
rates  of  wages  current  respectively  in  the  various 
businesses  of  the  country ;  the  elaborate  analyses 


Chap.  V.]  FABIAN  STATISTICS  TOT 

of  the  incomes  subject  to  Income-tax,  which  are 
set  forth  by  the  Commissioners  of  Inland 
Revenue;  and  the  Cens-is  Reports  relating  to 
the  number  of  individuals  engaged, in  each. class 
of  occupation,  or  not  epgaged  :iji  ^lay.  And. in 
a  certain  sense  this  claim  is  correct.  The 
Fabian  statistician  has,  with  a  few  exceptions, 
not  invented  his  figures.  He  has  found  them 
in  the  documents  cited  by  him;  but  he  has 
misunderstood,  and  ridiculously  mis-stated  their 
meaning. 

His  errors  are  least — though  even  then  they 
are  flagrant — when  he  is  dealing  with  the  income 
of  the  "  poor,"  or  the  mass  of  incomes  not 
exceeding  ,£160  a  year.  The  aggregate  of 
these  he  sets  down  as  no  more  than 
^995,000,000,  made  up  of  the  wages  and 
salaries  of  productive  workers;  but  in  order  to 
reduce  their  income  to  this  figure,  he  not  only 
fails  to  include  a  sum  of  ^"50,000,000  known 
to  go  to  such  persons  as  interest  on  invested 
capital;  he  also  deliberately  suppresses  a  sum 
of  ;£  1 00,000,000,  which  represents  the  wages 
earned  by  domestic  service.  Servants,  he  says, 
produce  nothing  that  has  any  economic  value. 
Their  work  adds  nothing  to  the  sum  of  the 
national  income;  and  in  dealing  with  the 
national  income,  both  they  and  their  wages  must 
be  eliminated.  Considered  on  its  own  merits, 
this  puerile  contention  hardly  needs  exposure. 
In  any  case  a  few  words  will  be  enough  to  point 
out  its  absurdity.  Nobody  denies  that  a  potter 
produces  an  economic  value  when  he  coats  a 

H  LIBRARY 

UNIVERSITY  OF  CALIFORNIA 


102  FABIAN   FALLACIES  [Book  II. 

dinner-plate  with  a  glaze,  without  which  it  would 
be  useless  because  it  could  not  be  washed  clean. 
It  is  -^obvious.,  that,  a  servant  who  washes  it 
produces  a  value  likewise,  because  for  practical 
purposes  the,  plate,  if  it  were  never  washed, 
would  be  just  as  valueless  as  it  would  be  if  it 
were  not  washable.  Again,  nobody  denies  that 
the  workers  in  a  great  biscuit  factory  are  pro- 
ducing values  when  they  turn  flour  into  biscuits. 
How  does  a  cook  fail  to  produce  values  likewise 
when  she  turns  raw  meat  into  soup  in  a  private 
kitchen?  Servants  produce  values  just  like 
any  other  workers,  and  whenever  any  estimates 
are  made  of  the  luxuries  which  rich  men  pur- 
chase, the  value  of  domestic  services  is  one  of 
the  most  important  items.  The  Fabian  statis- 
tician, therefore,  in  respect  of  the  income  of 
"  the  poor,"  is  at  once  seen  to  be  wrong  to  the 
extent  of  £  150,000,000;  but  if  we  merely  add 
to  the  total  which  he  himself  gives  the  income 
which  he  excludes,  though  he  does  not  deny  its 
existence,  the  aggregate  of  incomes  not  exceed- 
ing £160  a  year  will,  in  the  year  1905,  have 
been  nearly  ,£1,150,000  according  to  his  own 
authorities  :  and  even  if  we  suppose  that  since 
that  date  it  has  done  no  more  than  increase  in 
the  same  ratio  as  the  population,  the  total  for 
to-day,  which  in  that  way  would  be  reached, 
would  not  differ  by  more  than  six  per  cent, 
from  what,  as  we  shall  see  presently,  is  the  true 
amount. 

It  is  when  the  oracle  of  the  Fabian  Society 
comes   to   his   main   subject — the   income   and 


Chap.  V.)  "  THE  IDLE  RICH  "  103 

number  of  the  rich,  and  of  the  "  idle  rich  "  in 
particular,  that  his  carnival  of  error  begins  in 
downright  earnest. 

Let  us  first  take  his  figures  as  they  stand. 
According  to  him,  the  total  number  of  "  the 
rich,"  or  persons  subject  to  income-tax,  in  the 
year  1905,  somewhat  exceeded  1,000,000,  but 
was  not  as  much  as  1,100,000.  In  other  words, 
it  must  have  been  approximately  1,050,000,  the 
number  of  the  absolutely  idle  being  at  least 
660,000.  The  aggregate  income  of  "  the  rich  " 
was  ^925,000,000;  that  of  the  absolutely  idle 
section  was  ^"700,000,000 ;  that  of  the  occupied 
was  ,£225,000,000.  Now  these  figures  can  be 
put  to  a  very  simple  test,  by  comparing  them 
with  certain  others,  given  by  those  very  authori- 
ties on  which  the  Fabian  writer  relies.  These 
latter  figures  relate  to  the  occupied  section 
only — firstly  to  their  number,  secondly  to  their 
total  income.  Let  us  begin  with  the  question 
of  their  number. 

According  to  the  Census  of  1851,  the  clergy, 
the  barristers,  the  solicitors  and  doctors  of  the 
country  amounted  to  no  less  than  150,000.  By 
the  year  1905  the  number  of  them  had  certainly 
not  decreased.  According  to  the  Report  of  the 
Commissioners  of  Inland  Revenue  for  the  year 
1905,  there  were  60,000  business  firms  (exclu- 
sive of  public  companies),  each  of  which  firms 
must  have  represented  at  least  one  active 
partner;  the  number  of  salaried  employees 
(earning  more  than  £160  a  year),  of  business 
houses  and  of  the  State,  was  more  than  500,000; 


i<H  WORKERS  AND  IDLERS  [Book  II. 

and  to  these  must  be  added  at  least  20,000 
farmers.  If  such  be  the  number  of  a  portion 
of  the  occupied  rich  only,  and  if  the  number  of 
the  rich  altogether  was  at  that  time  not  much 
more  than  1,000,000,  how  can  the  number  of  the 
rich  who  are  absolutely  idle  be  by  any  possi- 
bility 660,000?  It  could  not  have  been  as 
much,  or  anything  like  so  much,  as  half  of  this. 
It  is  obvious  that  the  computation  of  Mr. 
Webb's  statistical  expert  not  only  has  no  rela- 
tion to  fact,  but  is  inconsistent  with  even  his 
own  primary  data. 

Let  us  now  take  the  question  of  incomes. 
The  aggregate  of  incomes  exceeding  ,£160 
a  year,  amounted,  according  to  him,  to 
^925,000,000.  This  figure  is  taken  from  cer- 
tain tables  in  the  Report  of  the  Commissioners 
of  Inland  Revenue  for  the  year  1905,  but  if 
we  refer  to  those  tables  themselves,  and  consider 
the  various  items  of  which  the  total  is  made  up, 
the  following  can  be  at  once  identified  (to  say 
nothing  of  others)  as  earnings  of  the  occupied, 
and  not  the  appropriations  of  the  idle  :  Income 
of  farmers,  ,£17,000,000;  Income  of  working 
partners  in  private  business  firms,  ,£60.000,000; 
Income  of  503,000  employees,  ,£116.000.000; 
Total  ,£193,000,000.  If  the  income  of  the  idle, 
then,  was  really  £ 7 00,000,000,  and  this  portion 
only  of  the  income  of  the  occupied  class  be 
added  to  it,  there  would  have  been  no  more  than 
^£32,000,000  left,  to  be  divided  amongst  the 
learned  and  all  other  professions,  to  sny  nothing 
of  shopkeepers,  owners  of  mills,  agents,  or  of 


Chap.  V.]  FABIAN  FALLACIES  105 

any  working  partners  in  businesses  run  as 
companies. 

Such,  even  if  we  suppose  the  figures  quoted 
by  the  Fabian  statistician  from  the  Commis- 
sioners of  Inland  Revenue,  to  bear  the  meaning 
which  he  himself  ascribes  to  them,  are  the 
results  of  his  insane  estimate  of  the  income  of 
"  the  idle  rich." 

But  what  we  have  glanced  at  thus  far  has 
been  the  surface  of  his  mistakes  only.  They 
originate  in  an  ignorance  deeper  than  anything 
that  has  been  yet  suggested.  His  figures  with 
regard  to  the  income  of  the  rich  are,  as  has  been 
said  already,  not  inventions  of  his  own.  He 
has  found  them  in  official  reports,  and  he  quotes 
them  with  substantial  accuracy;  but  he  totally 
mistakes  their  meaning.  They  are  figures  rep- 
resenting, as  is  very  carefully  explained  in  these 
documents,  "  the  gross  amount  or  amounts 
brought  under  the  review  of  the  Commissioners" 
for  the  purposes  of  ascertaining  what  the  amcymt 
liable  to  taxation  is ;  or,  in  other  words,  what  is 
the  true  net  total  of  private  incomes  exceeding 
^160  a  year.  But,  though  this  net  total  is 
included  in  it,  much  is  included  also  which, 
before  the  net  total  can  be  reached,  has  to  be 
thrown  overboard.  This  portion,  which  may 
be  called  the  refuse,  of  the  "  gross  amount 
reviewed,"  consists  of  various  elements  which 
have  one  common  characteristic.  They  form  no 
part  of  the  total  of  which  the  Commissioners  are 
in  search,  namely  that  which  is  divided  amongst 
private  individuals  in  net  incomes  exceeding 


To6  FABIAN  FALLACIES  [Book  II. 

^160  a  year.  They  consist :  Firstly,  of  incomes 
which  do  not  exceed  that  sum,  and  of  the 
revenues  of  charitable  bodies;  Secondly,  of 
amounts  which  are  not  income  at  all,  but  are  on 
the  contrary  outgoings,  comprising  insurances, 
and,  what  is  far  more  important,  the  cost  of  up- 
keep of  all  the  farms,  private  liouses,  business 
premises,  factory  plant,  railway  plant,  and  ship- 
ping of  the  United  Kingdom;  and  Thirdly,  of 
over-assessments,  including  the  imaginary  rent 
of  premises  shown  to  be  empty.  In  the  year 
1905  these  three  portions  were  nearly,  though 
not  precisely,  equal;  each  amounting  to  about 
^60,000,000,  and  the  actual  total  to 
£  1 80,000,000. *  All  these  amounts  were  struck 
off  from  the  "  gross  amount  reviewed  "  in  order 
to  reach  the  residue  which  alone  represented  the 
total  of  net  private  incomes  exceeding  ,£160. 

The  total  income,  therefore,  of  the  rich  or  the 
relatively  rich,  was  not  ^925,000,000,  as  the 
Fabian  writer  asserts.  It  was  not  more  than 
^"745,000,000.  By  reference  to  more  recent 
information,  which  will  be  dealt  with  in  another 
chapter,  it  will  be  seen  that  even  this  sum 
exceeds  the  reality  by  something  like  £  100,000; 
but  for  the  moment  let  us  take  it  as  it  stands — 
as  it  stands  disclosed  in  the  pages,  parts  of 
which  at  all  events  the  Fabian  statistician  must 
have  consulted;  and  now  let  us  apply  to  his 
figures,  as  thus  corrected,  the  same  test  which 

i.  The  actual  figures  for  1905  were  :  Small  exempted 
incomes,  ^52,400,000 ;  Charities,  ^10,500,000 ;  Upkeep  and 
Insurances,  £61,700,000;  Over-assessments,  £55,600,000. 


Chap.  V.]       NUMBER   OF  "  IDLE  RICH  "  107 

already  we  have  applied  to  them  in  their  crude 
form. 

If  some  660,000  idle  rich  men — men  who 
have  never  even  professed  to  have  so  much 
as  "  the  shadow  of  an  occupation,"  really 
appropriated  between  them  ^700,000,000,  how 
much  would  be  left  for  those  of  the  "  rich  "  who 
were  occupied — for  the  salaried  employees,  for 
the  larger  farmers  and  shopkeepers,  for  all  the 
active  partners  in  all  the  other  businesses  in  the 
Kingdom,  and  for  the  whole  of  the  professional 
classes?  If  the  income  of  the  idlers  equals 
that  which  the  Fabian  statistician  ascribes  to 
them,  the  share  of  the  occupied  will  be 
^45,000,000  only,  which  is  hardly  more  than 
one-third  of  the  income  earned  by  the  salaried 
employees  alone,  and  is  only  one-fifth  of  the 
sum — ^225,000,000 — which  the  Fabian  statis- 
tician himself  declares  to  be  the  earnings  of  the 
occupied  rich  as  a  whole. 

But  the  full  measure  of  his  absurdities  has  not 
been  disclosed  yet.  A  farther  point  still 
remains  to  be  considered.  This  is  not  the 
income  of  the  "  idle  rich,"  but  their  number, 
which  the  Fabian  sage  declares  to  be  about 
660,000.  Here  we  shall  get  a  new,  and  indeed 
a  sensational  light,  on  the  manner  in  which  the 
social  statistics  of  the  modern  reformer  are 
elaborated.  How  is  this  number  reached? 
Strange  to  say,  it  is  no  mere  freak  of  the 
imagination.  The  authority  on  which  it  is 
based  can  be  very  easily  identified.  It  is  based 
on  the  Census  Returns  for  the  year  1901,  and 


io8  NUMBER  OF  THE  "  IDLE  RICH  "    [Book  H. 

claims  to  represent  the  number  of  adult  males, 
there  given  respectively  for  England,  Scotland 
and  Ireland,  as  "unoccupied  persons."  Whether 
this  total  is  absolutely  correct  or  no,  is  not  very 
material.  In  any  case  it  is  large.  The  number 
of  such  persons  in  England  and  Wales  alone  is 
given  in  the  Returns  as  543,000.  The  charac- 
teristic error  of  the  Fabian  lies  not  in  the  total 
number  itself,  but  in  the  fact  that  he  has  no 
suspicion  of  what  the  number  really  means. 
Of  what  does  the  reader  think  that  this  body  of 
adult  males,  described  in  the  Census  Returns 
as  "unoccupied  persons"  consist?  Barely 
one-fifth  of  the  number — namely  persons  de- 
fined as  "  living  on  their  own  means  "  —can  by 
stretching  the  meaning  of  the  words  be  identified 
with  "  the  idle  rich,"  the  age  of  half  of  these 
being  more  than  sixty-five  years.  The  re- 
mainder, amounting  to  80  per  cent,  of  the 
whole,  was  made  up  of  what?  It  was  made  up 
of  tradesmen  and  others  who  had  retired  in 
their  declining  years  from  a  life  of  active 
business;  of  25,000  pensioners  drawing  ,£200  a 
year;  and  a  mixed  group  of  more  than  160,000 
persons,  consisting  mainly  of  "  special  inmates" 
of  workhouses,  but  including  also  the  blind,  the 
insane  and  the  imbecile,  permanently  housed  in 
asylums,  and  last,  but  not  least  remarkable,  a 
certain  number  of  convicts.  All  these,  like 
"  supers "  in  a  Christmas  pantomime,  are 
paraded  by  Mr.  Webb  and  his  friends  before 
the  eyes  of  a  gaping  multitude,  who  are  invited 
to  regard  them  with  feelings  of  revolt  and 


Chap.  V.]          MISLEADING    BLUNDERS  109 

horror,  as  so  many  gilded  voluptuaries  who  are  . 
eating  up  the  wealth  of  the  nation. 

Here,  then,  in  this  tissue  of  nonsense,  we 
have  not  only  an  example  but  (as  has  been  said 
already)  a  highly  flattering  example,  of  the 
methods  and  the  degree  of  accuracy,  repre- 
sented by  the  social  estimates  of  the  social 
reformers  of  to-day.  If  we  turned  from  Mr. 
Webb  and  his  Society  to  reformers  of  rival 
schools,  we  should  find  the  same  absurdities 
repeated  in  even  wilder  forms.  With  regard 
to  the  rich  in  the  special  sense  of  the  word — 
namely  persons  whose  incomes  exceed  ,£5,000 
a  year — we  should  find  their  aggregate  income 
set  down  as  almost  exactly  double  what  it  has 
been  shown  to  be  by  official  investigation.1  We 
should  find  the  income  of  the  comparatively 
rich — namely  all  those  whose  incomes  exceed 
£160  a  year,  set  down  by  one  reformer 
as  ,£1,300,000,000,  and  by  another  as 
;£  i, 600,000,000,  whereas  the  Fabians  content 
themselves  with  a  poor  ,£925,000,000. 

If,  however,  the  statistics  of  the  reformers  are 
really  of  a  kind  so  preposterous,  so  utterly  out 

i.  Mr.  Money  informed  the  Select  Committee  of  Income 
Tax,  in  the  years  1905-6,  that  the  imposition  of  a  supertax 
on  incomes  exceeding  ^5,000  would  disclose  an  aggregate 
income  of  ^250,000,000.  The  actual  amount  disclosed  several 
years  later  was  not  much  more  than  ,£130,000,000.  Mr. 
Hyndman  has  declared  that  the  capitalists  and  plundering 
classes  absorb  ten-thirteenths  of  the  entire  income  of  the 
nation.  One  of  the  leading  Trade  Union  agitators  in 
Scotland  has  declared  that  60  per  cent,  of  the  income  of 
the  nation  is  stolen  from  the  workers  by  the  profit-takers. 


no  ERRORS  EXPOSED 

of  relation  to  the  iacts  of  contemporary  life, 
why,  some  readers  may  ask,  is  it  necessary  to 
spend  time  on  a  minute  examination  of  blunders 
which  must  be  sufficiently  patent  to  any  sober 
and  intelligent  man?  The  answer  is  that, 
however  preposterous  these  blunders  may  be 
seen  to  be,  the  moment  they  are  examined 
seriously,  yet  until  they  are  so  examined  the 
ordinary  intelligent  man  has  no  means  of  know- 
ing that  they  are  blunders  at  all.  At  all  events 
he  will  be  unable  to  identify  them  and  measure 
their  precise  extent;  and  until  they  are  so 
identified,  and  can  thus  be  exposed  in  detail, 
the  reformer  may  repeat  them  with  impunity, 
multitudes  will  continue  to  accept  them ;  and 
even  moderate  men  will  imagine  that  they  are 
substantially,  if  not  literally,  true. 

Finally  it  may  be  added  that  when,  with 
regard  to  any  question,  gross  errors  have  won 
a  very  wide  acceptance,  the  identification  of 
these  errors  with  more  or  less  precision  is  the 
best  and  most  convenient  preparation  for  an 
exposition  of  the  actual  facts :  and  to  such  an 
exposition  we  will  now  go  on  to  address  our- 
selves. 


BOOK    III. 

A  STATISTICAL  REVIEW  OF  THE  INCOME  OF  THE 
UNITED  KINGDOM  AND  ITS  DISTRIBUTION 
AT  THE  PRESENT  DAY. 


NOTE. 

The  statistical  portion  of  this  work,  in  so  far  as 
it  may  present  any  difficulties  to  the  general  reader, 
is  mainly  comprised  in  Book  III.,  which  those  who 
are  more  interested  in  final  results  than  in  details 
may  use  at  their  discretion  for  purposes  of  reference. 

It  had  been  the  author's  original  design  to  have 
relegated  many  of  the  figures  given  in  Book  III.  to 
a  supplement  consisting  of  very  elaborate  tables : 
but,  as  for  various  reasons  this  has  been  thought 
undesirable,  certain  references  are  given  in  foot- 
notes to  a  series  of  Statistical  Monographs,  con- 
taining minute  analyses  of  official  information, 
which  have  been  issued  by  him  for  the  use  of 
speakers  and  others,  from  the  offices  of  The  Liberty 
and  Property  Defence  League,  25,  Victoria  Street, 
S.W.,  and  which  are  obtainable  by  application  to 
the  Secretary  at  that  address. 


CHAPTER   I. 

IN  any  general  review  of  our  national  income 
and  its  distribution,  there  are  four  points  to  be 
considered  : — 

Firstly,  the  net  total,  or  the  total  available 
by  the  recipients  for  their  own  private  expendi- 
ture on  the  necessaries  and  luxuries  of  existence. 

Secondly,  the  division  of  this  total  amongst 
the  two  sections  of  the  population  commonly 
described  as  the  richer  and  the  poorer  classes, 
or  those  subject  and  not  subject  to  income-tax. 

Thirdly,  the  composition  of  the  national 
income  generally,  when  translated  from  terms 
of  money  into  the  things  that  money  represents. 

Fourthly,  the  amount  going  to  each  group  of 
recipients,  relatively  to  the  number  of  persons 
comprised  in  each  group  separately. 

To  begin,  then,  with  the  net  total.  This, 
according  to  the  latest  information — namely, 
that  provided  by  the  recent  Census  of  Produc- 
tion— would  appear  at  first  sight  to  be  nearly 
2,200  million  pounds.1  In  the  Census  of  Pro- 

i.  The  Census  of  Production  deals  with  the  national 
income  from  an  entirely  new  standpoint.  It  deals  with 
the  actual  value  of  material  goods  produced  and  consumed 
in  the  United  Kingdom,  and  the  actual  cost  and  value  of 
services.  Other  computations  are  based  on  wages-returns, 
and  income-tax  returns.  The  Census  of  Production  is 
entirely  independent  of  these. 

"3 


ii4  NET   INCOME  [Book  III. 

duction,  however,  the  term  "  net  income  "  is 
employed  in  a  somewhat  unusual  sense.  It 
includes  the  cost,  borne  mainly  by  the  employ- 
ing classes,  of  the  upkeep  of  all  the  farm-lands, 
buildings,  machinery,  shipping,  and  industrial 
appliances  by  means  of  which  the  income  is 
produced;  and  if  this  be  deducted,  the  re- 
mainder— the  true  net  income — will  amount,  as 
we  shall  see  presently,  to  about  2,020  million. 
This  total  coincides  almost  exactly  with  that 
which  expert  statisticians  had  already  reached 
by  different  methods  of  enquiry.  Moreover, 
when  it  is  remembered  that  the  figures  of  Mr. 
Webb  and  his  friends  relate  to  the  year  1905, 
and  that  the  population  and  income  of  the 
country  have  since  that  time  increased,  we  shall 
find  that  it  corresponds  substantially  with 
socialist  computations  of  the  national  income 
also. 

We  thus  start  with  a  fact  as  to  which  all 
parties  are  agreed.  The  first  difference  between 
facts  and  the  wild  fallacies  of  reformers  appears 
in  connection  with  the  division  of  this  total  into 
incomes  which  exceed  and  which  do  not  exceed 
,£160  a  year,  and  which  are  respectively  subject 
and  not  subject  to  income-tax. 

It  will  presently  be  shown  in  detail  that  this 
latter  group  of  incomes  amounts  at  the  present 
time  to  about  1,300  millions,  whereas  according 
to  Mr.  Webb  and  his  brother  socialists  it  was 
barely  1,000  millions  five  or  six  years  ago.  But 
this  discrepancy  is  not  so  great  as  it  seems.  If 
Mr.  Webb  and  his  friends  had  stated  their  case 


Chap.  I.]          THE   NATIONAL  INCOME  115 

in  full,  the  then  total  would,  according  to  their 
own  admissions  have  been  hardly  less  than 
1,150  millions;  and  if  allowance  be  made  for 
the  increase  in  the  number  of  wage-earners,  and 
for  a  certain  increase  in  wage-rates,  which  have 
taken  place  since  then,  the  present  total,  even 
according  to  the  data  of  the  socialists,  would 
not  differ  by  more  than  6  per  cent,  from  that 
which  has  just  been  stated. 

Here,  then,  we  have  two  figures  as  starting- 
points — 2,020  million  pounds  as  the  net  income 
of  the  nation,  and  1,300  millions  as  the  total  of 
incomes  not  exceeding  ^160  a  year — figures 
which  may  indeed  be  subject  to  some  revision 
when  examined  more  minutely,  but  the  sub- 
stantial correctness  of  which  even  reformers  do 
not  seriously  dispute. 

The  main  errors  of  the  reformers,  whether 
calling  themselves  socialists  or  not — the  errors 
which  place  their  estimates  out  of  all  relation  to 
reality — begin  (let  it  be  said  once  more)  when 
such  persons,  turning  from  what  they  call  the 
income  of  the  "  poor,"  exercise  their  powers  of 
analysis  on  what  they  call  the  income  of  the 
"  rich,"  These  errors  are  mainly  of  two  kinds. 
each  of  which  can  be  identified  with  the  utmost 
ease.  The  first  consists,  as  was  explained  in 
the  last  chapter,  in  identifying  "  the  gross 
amount  reviewed  for  income-tax  purposes,  by 
the  Commissioners  of  Inland  Revenue  "  with 
the  total  of  net  incomes  exceeding  ^160  a  year. 
The  second  consists  of  the  inclusion  of  profits 
coming  from  abroad,  and  involving  the  wages 


n6  BASIS  OF  INCOME  TAX         [Book  III. 

of  foreign  productive  labour  only,  in  the  total 
which  is  compared  with  the  wages  of  labour  in 
the  United  Kingdom. 

With  regard  to  the  first  of  these  proceedings, 
we  have  already  seen  in  detail  how  it  resulted 
in  the  representation  by  Mr.  Webb  and  his 
friends  of  the  incomes  subject  to  income-tax  in 
the  year  1905  as  amounting  to  no  less  than 
;£9 2 5, 000,000;  whereas  the  very  documents 
from  which  this  figure  was  taken  demonstrate 
that  the  true  total  was,  to  say  the  most  of  it, 
not  in  excess  of  ^745,000,000.  If  the  Fabians, 
by  way  of  providing  a  new  exhibition  of  incom- 
petence, were  to  apply  the  same  method  of 
computation  to  the  matter  as  it  stood  in  the 
year  1910,  they  would  give  the  total  of  incomes 
in  excess  of  ,£160  as  amounting  to  no  less  than 
^1,045,000,000,  such  having  been  in  that  year 
the  gross  total  "  reviewed."  This  is  precisely 
what  in  his  book,  "  Socialism  and  Syndicalism," 
Mr.  Philip  Snowden  docs.  The  main  statistical 
proposition  with  which  he  opens  his  argument 
is  that,  the  income  of  this  country  being  about 
^"2,000,000,000,  the  rich  and  the  comparatively 
rich — namely,  the  persons  subject  to  income- 
tax — had,  in  the  year  1910,  an  income  of 
^1,045,000,000  between  them. 

Here  we  have  an  error  so  constantly  and  so 
obstinately  repeated — repeated  even  in  the 
House  of  Commons,  and  there  listened  to 
without  any  efficient  protest — that  its  true 
character  may  with  advantage  be  impressed 
once  more  upon  the  reader.  When  the  Income- 


Chap.  I.]  AN  ILLUSTRATION  117 

tax  Commissioners  record  that  such  and  such 
a  "  gross  amount "  has  been  "  reviewed  "  by 
them,  they  simply  mean  that  they  have  collected 
a  vast  number  of  documents,  each  purporting 
to  represent  a  certain  sum  of  money,  and  have 
reviewed  them,  or  (in  plain  English)  gone 
through  them,  with  the  object  of  picking  out 
those  and  those  only,  which  stand  for  net  private 
incomes  amounting  to  more  than  ^160  a  year. 
Their  procedure  in  short  is  like  that  of  a  detec- 
tive who,  employed  to  look  for  proofs  that  the 
managing  director  of  a  company  has  been 
robbing  the  company  by  paying  into  his  private 
account  cheques  of  a  value  in  excess  of  the 
salary  due  to  him,  finds  a  bundle  of  cheques  in 
the  office  of  the  supposed  delinquent,  which 
have  been  returned  from  the  bank  as  cashed; 
and  reviews  or  goes  through  the  whole,  in  order 
to  ascertain  which  of  them  have  been  converted 
by  the  manager  to  his  own  personal  use.  Let  us 
suppose,  then,  that  the  value  of  the  whole  collec- 
tion reviewed  turns  out  to  be  ,£1,045;  tnat  tne 
salary  due  to  the  manager  was  admittedly  ,^820, 
that  cheques  to  that  amount  paid  to  himself  are 
identified;  that  the  rest,  to  the  value  of  ,£225, 
have  been  paid  to  a  painter  and  a  paperhanger 
for  redecorating  the  company's  premises,  and 
that  information  to  this  effect  is  placed  by  the 
detective  in  the  hands  of  the  person  employing 
him.  What  would  be  said  of  such  a  person 
if,  at  a  general  meeting  of  the  shareholders,  he 
declared  that  the  manager  had  appropriated 
out  of  the  company's  funds  .£1,045  when  only 


ii8  "GROSS  AMOUNT  REVIEWED"  [Book  III. 

^"820  was  due  to  him,  the  sole  ground  for  the 
charge  being  the  fact  that  cheques  for  the  larger 
amount  had  been  found  in  the  manager's  desk, 
and  that  somebody  or  other  had  taken  a  look 
at  all  of  them?  If  Mr.  Snowden  in  similar 
circumstances  were  the  object  of  a  similar 
accusation  based  on  similar  grounds,  the  terms 
which  he  would  apply  to  his  accuser  may  be 
very  easily  imagined.  The  conduct  of  such  an 
accuser  would  in  no  way  differ  from  that 
deliberately  practised,  in  connection  with  the 
income  of  the  "  rich  "  by  Mr.  Snowden  himself, 
and  his  brother  reformers  generally. 

Let  us  now  return  to  the  "  gross  amount 
reviewed "  by  the  Income-tax  Commissioners 
in  the  year  1910,  which  was  ,£1,045  turned  into 
so  many  millions.  Mr.  Snowden  seriously 
declares  that  such  was  the  amount  "  observed  " 
by  them  as  made  up  of  incomes  exceeding  ,£160. 
The  Income-tax  Commissioners  observed 
nothing  of  the  kind.  On  the  contrary  they  ob- 
served and  stated,  by  means  of  eight  analytical 
tables,  that,  out  of  the  sum  which  Mr.  Snowden 
quotes  /^225,ooo,ooo1  consisted  of  amounts  of 
a  character  wholly  different  from  that  which  he 

i.  Whilst  these  pages  were  in  the  press,  a  new  Report 
was  issued  by  the  Commissioners  of  Inland  Revenue,  in 
which  an  item  of  information  is  for  the  first  time  given, 
showing  that  for  the  last  year  or  two  about  £5,000,000  hafi 
been  included  in  the  official  deductions,  which  is  really  a 
new  group  of  abatements,  in  respect  of  children.  This 
affects  the  figures  given  in  the  text  to  the  extent  of  about 
one-third  per  cent. 


Chap.  I.]  COST  OF  UPKEEP  119 

deliberately  ascribes  to  them.  They  observed 
that  about  ^"70,000,000  was  only  money  on 
paper,  consisting  of  over-assessments  rectified  on 
appeal  or  otherwise;  that  another  ^70,000,000 
was  income  going  to  "  poor "  persons  and 
cfrarities;  and  that  a  sum  considerably  larger 
was  not  income  at  all,  but  consisted  of  insur- 
ances, together  with  the  cost  of  upkeep  of  all 
the  farms,  all  the  buildings,  all  the  machinery, 
and  industrial  appliances  of  the  kingdom. 
Hence,  so  far  as  the  facts  of  the  case  are  shown 
by  the  official  reports  dealing  with  the  collec- 
tion of  income-tax,  the  aggregate  of  private 
incomes  exceeding  ,£160,  was,  in  the  year  1910, 
not  ^1,045,000,000,  but  ^820,000,000;  and 
even  this  sum,  as  shall  now  be  shown,  is 
excessive. 

We  here  come  to  a  matter  which  persons  like 
Mr.  Snowden  cannot  be  blamed  for  neglecting ; 
for  definite  information  with  regard  to  it  only 
became  accessible  towards  the  close  of  the  year 
1912.  This  is  the  cost  of  upkeep.  It  has 
always  been  asserted  by  business  men  of  all 
kinds  that  the  statutory  allowances  in  respect 
of  this  class  of  outgoings  fall  very  far  short  of 
the  actual  sums  expended.  In  the  year  1910 
these  allowances  amounted  to  ^67,000,000. 
The  actual  cost,  as  compared  with  the  amount 
"  allowed  "  has,  in  the  Census  of  Production, 
been  made  for  the  first  time  the  subject  of 
official  enquiry.  The  various  forms  of  capital 
requiring  such  expenditure  for  their  mainten- 
ance are,  in  the  Census  of  Production,  deak 


120  INCOME  OF  "RICH  AND  POOR     [Book  TIT. 

with  one  by  one ;  and  the  actual  cost  of  upkeep, 
including  renewals,  is  given  as  exceeding  the 
allowances  by  at  least  ^100,000,000.  This 
excess  must  therefore  be  added  to  the  official 
deductions;  and  the  true  net  total  of  incomes 
subject  to  income-tax  will  have  been  in  the  year 
1910,  not  ,£820,000,000,  as  shown  in  the  report 
of  the  Commissioners,  but,  as  presently  will  be 
shown  in  detail,  about  ^"720,000,000. 

The  net  income  of  the  country  being,  then, 
by  common  admission,  ,£2,000,000,000,  or  a 
very  little  more,  about  £*j 20,000,000  is  the 
share  of  the  rich  and  the  comparatively  rich, 
and  ^1,300,000,000  is  the  share  of  the  poor 
and  the  comparatively  poor.  In  other  words, 
the  aggregate  income  of  the  rich,  instead  of 
being,  as  Mr.  Snowden  and  the  Fabian  oracle 
declare,  nearly  as  great  as,  or  even  greater  than, 
the  aggregate  income  of  the  "  poor,"  is  in 
reality  not  much  more  than  half  of  it. 

But  even  yet  we  are  far  from  having  reached 
the  true  facts  of  the  case;  for  if  we  proceed  to 
consider  these  two  portions  with  a  view  to 
drawing  any  moral  from  a  comparison  of  their 
respective  magnitudes,  it  still  remains  for  us  to 
take  account  of  the  farther  fact,  that  a  very 
large  fraction  of  the  income  going  to  the  "rich" 
consists  of  profits  from  abroad,  which,  so  far 
as  their  origin  is  concerned,  have  no  connection 
whatever  with  labour  in  this  country.  The 
significance  of  this  fact  has  already  been 
explained  at  length;  but  it  may,  in  view  of  its 
importance,  be  advantageously  restated  here. 


Chap.  I.]         MR.  SNOWDEN'S  FIGURES  xai 

When  persons  like  Mr.  Snowden,  or  Mr. 
Webb  and  his  friends,  divide  the  national 
income  into  two  contrasted  portions — the  one 
subject  to  income-tax,  and  roughly  described 
by  them  as  "  profits,"  the  other  exempt  from 
income-tax,  and  roughly  described  by  them  as 
"  wages "  —they  invariably  summarise  their 
moral  in  the  following  familiar  language :; 
"  Here  are  the  profits  of  capital :  there,  the 
wages  of  labour.  How  huge  the  one,  and  how 
relatively  small  the  other !  "  Now  apart  from 
any  error  in  the  actual  figures  given,  such  a 
comparison,  even  in  this  rough  form,  would  be 
legitimate,  were  but  one  condition  fulfilled. 
This  condition  is  that  both  figures  are  complete, 
in  the  sense  that  everything  which  each  purports 
to  include  is  included  in  it.  But  in  computa- 
tions such  as  Mr.  Snowden's,  and  those  of  his 
brother  reformers  generally,  this  condition  is 
absent.  One  of  the  figures  is  complete.  The 
other,  even  according  to  their  own  principles, 
is  not.  It  is  one  of  the  cardinal  doctrines  of 
all  such  persons  that  no  profits  on  capital  are 
producible  without  labour,  or  in  other  words, 
without  the  payment  of  wages;  for,  unless  they 
received  wages,  the  labourers  could  not  live. 
Such  being  the  case,  in  the  total  described  as 
"  profits "  everything  received  by  persons 
domiciled  in  this  country  to  which  it  is  possible 
to  apply  that  name  is  included;  and  so  far  as 
"  profits "  originate  in  England,  Scotland  or 
Ireland,  the  wages  corresponding  to  such  profits 
are  duly  included  in  the  total  described  as 


xaa  WAGES  PAID.  ABROAD  [Book  III. 

"  wages."  But  with  regard  to  profits  from 
abroad,  this  is  not  so.  Whilst  they  appear  in, 
and  help  to  inflate,  the  total  of  profits  stated, 
our  home  statistics  contain  no  trace  whatever 
of  the  wages  of  labour  which  correspond  to 
them.  These,  if  stated  anywhere,  are  stated  in 
the  industrial  statistics  of  the  Rand,  of  the 
United  States,  of  Egypt,  of  the  Argentine 
Republic,  and  various  other  regions.  They 
are  certainly  not  stated  in  those  of  the  United 
Kingdom. 

Hence,  to  compare  profits  from  abroad  with 
the  wages  of  labour  at  home,  is  according  to 
the  principles  of  the  reformers  themselves  an 
absurdity.  If  any  general  comparison  between 
"  profits  "  and  "  wages  "  is  to  be  made,  either 
the  wages  paid  abroad  must  be  added  to  the 
home  wage-bill,  or  the  profits  coming  from 
abroad  must  be  deducted  from  the  total  subject 
to  our  home  income-tax.  Now  a  certain  portion 
of  the  wages  so  paid  abroad — namely,  those 
corresponding  to  the  profits  from  certain  foreign 
railways — might  be  estimated  with  some  accu- 
racy; but  we  have  no  means  of  arriving  at  a 
reliable  computation  of  the  whole.  We  cannot 
therefore  adopt  the  course  of  adding  these 
wages  to  the  wage-bill  of  our  own  country.  We 
must  do  what  will  lead  us  to  a  practically 
equivalent  result.  We  must  deduct  these 
profits  from  abroad  from  the  total  which  is  taxed 
at  home.  Only  so  can  we  get  two  sums  which 
are  really  comparable — the  wages  paid  to 
labour  in  this  country,  and  the  only  profits  in 


Ohap.  I.]  DEDUCTIONS  123 

the  production  of  which  that  labour  is  a  factor. 
What,  then,  is  the  sum  to  be  thus  deducted, 
ki  respect  of  the  year  1910,  from  the  total  of 
net  incomes  on  which  income-tax  was  paid  by- 
inhabitants  of  the  United  Kingdom  ?  Of  alt 
the  elements  of  which  the  taxable  total  is 
composed,  these  profits  from  abroad  are  the 
element  which  of  late  years  has  increased  most 
rapidly.  For  example,  since  the  year  1904 
whilst  the  taxable  total  has  increased  by  less 
than  n  per  cent.,  profits  from  abroad  have 
increased  by  more  than  50  per  cent.,  and  have 
now,  according  to  the  latest  information,  reached 
the  enormous  sum  of  ,£240,000,000.  It  will 
however,  be  shown  presently  that  of  this 
imported  income  about  one-fourth  is  absorbed 
by  the  costs  of  commercial  distribution,  and 
that  not  more  than  ^180,000,000  is  a  direct 
addition  to  those  profits  which  are  purely 
of  home  origin.  If,  then,  from  a  grand  total 
of  £*j 20,000,000  we  deduct  this  sum  which  in 
its  origin  is  as  purely  foreign  it  would  be  if  it 
tumbled  into  the  British  Islands  out  of  the 
moon,  the  total  of  the  home-produced  incomes 
in  excess  of  ,£160  will,  in  the  year  1910,  not 
have  amounted  to  more  than  ^"540,000,000. 
If  this  sum  be  added  to  the  income  of  the  poorer 
classes,  we  have  for  the  year  IQTO  a  home- 
produced  national  income  of  1,840  millions. 
Of  this  the  share  of  the  poorer  classes  will  have 
been  1,300  millions,  and  the  share  of  the  richer 
will  have  been  540  millions.  Thns,  wherens 
according  to  Mr.  Srtowden,  the  latter  sum,  or 


124  INCOME  ANALYSED  [Book  III. 

"  profits,"  formed  more  than  half  of  the  total, 
and  the  former  sum,  or  "  wages "  formed  a 
fraction  appreciably  less,  profits,  so  far  as  the 
home-produced  income  is  concerned,  were  in 
reality  considerably  less  than  one-third,  and  the 
"  wages "  corresponding  to  them  wrere  very 
nearly  three-quarters. 

Such  are  these  masses  of  income  as  expressed 
in  terms  of  money;  but  money  is  merely  the 
measure,  it  is  not  the  substance,  of  income. 
As  must  be  obvious  to  anyone  who  will  give 
himself  the  trouble  to  reflect,  the  substance  of 
income  resolves  itself  into  two  elements,  namely 
material  goods,  such  as  food,  clothes,  fuel, 
houses,  and  so  forth,  in  the  first  place ;  and 
personal  services  received  by  one  person  from 
another,  in  the  second  place,  such  as  those 
rendered  by  the  teacher,  the  doctor,  the  domes- 
tic servant,  or  the  railway  porter  who  handles 
the  luggage  of  the  excursionist.  Any  individual 
who  kept  fairly  accurate  accounts  might  find  out 
in  what  proportions  goods  and  services  com- 
bined to  make  up  income  in  his  own  individual 
case.  The  question  which  he  would  have  to 
answer  would  be  of  a  very  simple  kind  :  How 
much  do  I  spend  on  having  things  made  for 
me,  and  how  much  do  I  spend  on  having  things 
done  for  me?  But  the  matter  is  not  so  simple 
when  we  are  dealing  with  the  income  of  a 
nation ;  and  so  far  as  the  income  of  the  United 
Kingdom  is  concerned,  there  was  till  very  lately 
no  direct  evidence  to  show  how  much  of  it,  as 
measured  in  terms  of  money,  was  made  up  of 


Chap.  I.]        THE  IMPORTED   ELEMENT  125 

personal  services,  and  how  much  of  goods.  In 
the  Census  of  Production  such  ev'ience  may  at 
last  be  found.  It  is  there  shown  that,  if  we 
take  the  national  income  in  its  integrity,  a  little 
more  than  twelve  hundred  million  pounds  out 
of  a  total  of  over  2,000  million  is  accounted  for 
by  the  value  of  goods  at  the  time  of  their 
passing  into  the  hands  of  the  commercial  dis- 
tributors; and  that  the  complicated  process  of 
distribution,  by  which  alone  they  are  rendered 
accessible  to  the  final  users  or  consumers, 
increases  their  value  by  about  33  per  cent. — 
that  is  to  say,  by  about  400  million  pounds. 
Thus  something  over  1,600  million  pounds,  or 
about  four-fifths  of  the  total  income  of  the 
nation,  is  represented  by  goods  as  invested  with 
their  final  value,  or  their  value  at  the  time  when 
the  use  or  enjoyment  of  them  begins;  and  the 
remaining  400  millions  is  represented  by  ser- 
vices. 

If,  however,  we  confine  our  attention,  as  we 
are  now  doing,  to  that  part  of  the  national 
income  which  is  produced  in  the  United  King- 
dom, and  in  the  production  of  which  home 
labour  co-operates,  and  thus  eliminate  the  part 
which  comes  to  us  ready-made  from  abroad, 
not  only  will  the  total  be  reduced,  but  the  above 
proportions  will  be  altered.  The  imported 
element  consists,  and  can  only  consist,  of 
material  goods  of  one  kind  or  another;  and  it 
is  from  the  goods-income,  as  above  stated,  that 
the  required  deduction  must  be  made.  The 
home-produced  goods-income,  apart  from  the 


xa6  HOME  AND  IMPORTED  INCOME    [Book  III. 

value  added  by  the  process  of  commercial 
distribution,  is  shown  by  the  Census  of  Pro- 
duction to  be  not  more  than  ^9  7  0,000,000. 
Accordingly,  if  the  income  of  the  United 
Kingdom  be  taken  as  the  income  produced 
within  our  own  insular  borders,  the  primary 
value  of  the  material  goods  comprised  in  it  will 
be  as  970  out  of  a  total  of  1,840,  instead  of  a 
total  of  1,200  out  of  a  total  of  2,020,  or  57 
instead  of  65  per  cent. ;  whilst  the  income 
represented  by  distribution  and  personal  ser- 
vices may,  for  the  purposes  of  the  present 
argument,  be  assumed  to  remain  the  same. 

Provisionally,  then  (for  the  figures  require 
some  slight  qualification)  what  we  have  seen 
thus  far  may  be  briefly  summed  up  thus.  The 
home-produced  income  of  the  United  Kingdom 
amounts  to-day  to  about  ^"1,840.000,000. 
About  three-fifths  of  this  consists  of  goods  as 
lying  at  the  places  of  production;  about  one- 
fifth  is  the  value  added  to  them  by  the  process 
of  bringing  them  to  the  consumers;  about  one- 
fifth  consists  of  personal  services;  and  the  total 
thus  composed  is  divided  into  two  portions— 
the  one,  amounting  to  ,£1,300,000,000,  and 
consisting  of  incomes  not  exceeding  ^160  a 
year;  the  other  consisting  of  incomes  above  that 
limit,  and  amounting  in  the  aggregate  to 
;£5  40,000,000 

We  may  now  proceed  to  the  question  on 
which,  for  practical  purposes,  the  whole  signi- 
ficance of  the  above  facts  depends— that  is  to 
say,  the  number  and  character  of  the  persons 


Uiap.  l.j  "  LEISURED  CLASSES"  137 

amongst  whom  respectively  these  two  portions 
are  divided. 

Of  the  total  population  of  the  United  King- 
dom, which  is  approximately  45,000,000,  about 
26,000,000  are  persons  of  working  age,  or  be- 
tween the  ages  of  fifteen  years  and  seventy.  Of 
these  26,000,000  persons  about  20,000,000  are 
"  workers  for  gain,"  or  producers  of  income 
in  one  way  or  another.  Of  the  remaining 
6,000,000,  it  is  possible  that  as  many  as  100,000 
may  be  men  described  as  "  living  on  their  own 
means  " — men  who,  whether  usefully  active  or 
idle,  do  not  depend  for  their  incomes  on  pro- 
ductive efforts  of  their  own;  and  to  these  men 
whom,  according  to  our  point  of  view,  we  may 
identify  as  the  "  leisured,"  or  denounce  as  the 
"  idle  "  classes,  we  may  for  argument's  sake, 
add  an  equal  number  of  women.  The  rest  of 
the  6,000,000  persons  who,  although  they  are 
of  working  age,  are  technically  described  in  the 
census  returns  as  "  unoccupied,"  are  women, 
mostly  married,  who  as  members  of  working 
families,  pass  their  lives  in  performing  the 
duties  of  unpaid  servants — in  bearing  and  rear- 
ing children,  darning  their  husband's  socks, 
cooking  the  household  dinner,  and  scrubbing 
the  household  floor. 

Of  the  20,000,000  workers,  about  14,000,000 
are  males,  including  men  and  youths,  and 
6,000,000  are  females,  including  women  and 
girls.  About  12,000,000  are  engaged  in  the 
production  of  material  snoods ;  about  4,000,000 
in  selling  them  to  the  final  buyers;  and  about 


128  PAYERS  OF  INCOME  TAX       [Book  III. 

4,000,000  in  rendering  personal  services  other 
than  the  unpaid  services  of  the  women  already 
mentioned. 

Thus  the  number  of  separate  incomes  directly 
earned,  or  directly  produced,  by  work,  being 
approximately  20,000,000,  and  the  assumed 
number  of  the  "  idlers "  being  as  much  as 
200,000,  the  number  of  separate  incomes 
received  as  resulting  from  work  or  otherwise, 
may  be  taken  as  20,000,000,  with  200,000 
added. 

Here,  then,  is  the  final  question  to  which  this 
preliminary  survey  has  been  leading  us.  The 
home-produced  national  income  being  divisible 
into  two  sums — the  one  amounting  to  1,300 
million  pounds  made  up  of  incomes  below  a 
certain  limit,  and  the  other,  amounting  to  540, 
millions,  and  consisting  of  incomes  above  it — 
amongst  how  many  persons  respectively  out  of 
20,200,000  are  the  former  sum  and  the  latter 
sum  apportioned?  This  question  will  be  most 
readily  answered  by  beginning  with  a  considera- 
tion of  the  latter — namely  the  ^540,000,000 
which  is  made  up  of  incomes  exceeding  ,£160 
a  year. 

The  number  of  persons  whose  incomes 
exceed  ^160  a  year,  and  who  are  thus  subject 
to  income-tax  has  by  certain  statisticians  been, 
for  the  last  six  years,  carelessly  estimated  at 
1,100,000.  This  figure,  however,  as  will  be 
shown  by  detailed  evidence  presently,  falls  far 
short  of  the  truth,  the  number  of  persons  subject 
to  income-tax  to-day  being  definitely  indicated 


Chap.  I.]  AVERAGE   INCOMES  129 

as  something  like  1,400,000,  who  may,  together 
with  their  families,  be  taken  as  representing  a 
population  of  about  7,000,000  individuals. 
Hence,  if  the  total  number  of  incomes  be 
20,200,000,  and  the  number  of  those  exceeding 
;£i6o  a  year  be  deducted,  the  number  of  per- 
sons whose  incomes  do  not  exceed  that  sum 
will  be  about  18,800,000;  and  38,000,000  will 
be  the  number  of  the  total  population  repre- 
sented by  them. 

With  these  figures  before  us,  we  are  able  to 
state  intelligibly  what  the  distribution  of  the 
home-produced  income  of  the  United  Kingdom 
is,  as  between  those  two  groups  which  the  social 
reformers  distinguish  as  the  richer  and  the 
poorer  classes.  If  the  two  portions  of  that 
income  which  are  here  in  question  be  divided 
respectively,  first  by  the  number  of  the  direct 
recipients,  and  then  by  the  number  of  the 
recipients  with  that  of  their  families  added  to 
it,  the  average  income  per  head  will  in  each 
case  be  as  follows. 

Of  the  direct  recipients  of  incomes,  in  the 
case  of  the  poorer  classes,  the  average  income 
per  head  will  be  ^69.  In  the  case  of  the  richer 
(additions  from  abroad  being  excluded)  the 
corresponding  average  will  be  ,£400. 

Of  the  total  population  represented  by  the 
direct  recipients,  the  average  income  per  head 
in  the  case  of  the  poorer  classes  will  be  ,£34. 
In  the  case  of  the  richer  classes,  it  will  be  ^80. 

In  other  words,  if  the  aggregate  income  of 
the  poorer  classes  were  divided  in  equal  shares 


130  MR.  KEIR  HARDIE  [Book  ffl. 

amongst  all  its  direct  recipients,  and  if  the 
aggregate  income  of  the  richer  classes  (in  so 
far  as  it  is  of  home  origin)  were  divided  in  the 
same  way,  we  should  have  on  the  one  hand 
nearly  19,000,000  persons  each  in  the  financial 
position  at  present  occupied  by  a  moderately 
skilled  mechanic;  and  on  the  other  hand  we 
should  have  nearly  one  and  a  half  million  (all 
of  those  now  denounced  by  persons  like  Mr. 
Keir  Hardie  as  exorbitantly  rich,  being  included) 
each  of  whom  financially  would  occupy  the 
precise  position  now  occupied  by  Mr.  Keir 
Hardie  himself  and  other  members  of  his  party, 
who,  having  ceased  to  perform  labour,  receive 
what  they  regard  as  a  moderate  salary  for 
representing  it. 

Such  statements,  however,  though  provi- 
sionally they  have  their  uses,  give  a  very  imper- 
fect picture  of  the  graduated  actualities  of  the 
situation ;  and  before  we  moralise  farther  on  the 
facts  as  thus  far  stated,  these  shall  now  be 
reconsidered  in  detail.  We  will  begin  with  the 
aggregate  of  incomes  not  subject  to  income-tax, 
and  the  direct  recipients  (their  number  being 
18,800,000)  amongst  whom  that  aggregate  of 
1,300  million  pounds1  is  divided. 

i.  This  includes  income  of  Charities  (about  12  millions), 
as  shown  in  income-tax  deductions ;  hut  does  not  include 
profits  of  co-operative  societies  (estimated  at  about  it 
millions)  which  are  not  reviewed  by  the  Commissioner*. 


CHAPTER    II. 

THE  18,800,000  "producers"  or  "workers  for 
gain,"  none  of  whose  incomes  exceed  ^160  a 
year,  and  who  for  rhetorical  purposes  are  con- 
tinually called  "  the  poor,"  are  for  similar 
purposes  also  continually  spoken  of  as  "  the 
employed,"  the  "  labourers "  or  the  "  wage- 
earners." 

To  the  majority  of  them  no  doubt  these  latter 
terms  are  applicable,  but  not  by  any  means  to 
the  whole.  The  millions  of  persons  in  question 
comprise  three  groups  at  all  events  which,  with 
equal  frequency  and  with  much  greater  accuracy 
of  suggestion,  are  roughly  distinguished  by  the 
name  of  the  "Lower  Middle  Classes."  Neither 
the  number,  composition,  or  the  incomes  of 
these  last  have  been  dealt  with  by  the  Board  of 
Trade  in  any  of  their  enquiries  into  earnings 
and  hours  of  labour.  They  have,  however, 
been  made  the  subject  of  a  systematic  investi- 
gation by  a  committee  of  distinguished  econo- 
mists (including  Professor  Cannan  and  Mr.  A. 
Bowley),  to  whom  semi-official  assistance  of  an 
exceptional  kind  was  given;  and  a  very 
elaborate  report,  embodying  the  results  of  their 
work,  was  presented  to  the  British  Association 
in  the  year  1910  on  the  occasion  of  its  meeting 
at  Sheffield. 

According  to  this  report,  the  Lower  Middle 
Classes,  not  subject  to  ;r!come-tax,  comprise  (in 

131 


132  LOWER  MIDDLE  CLASSES        JBook  III. 

addition  to  a  variety  of  workers  who  would 
commonly  be  included  in  the  labour-class)  the 
three  following  groups,  which  account  between 
them  for  2,300,000  persons,  and  an  aggregate 
income  of  ^250,000,000. 

(1)  Heads     of     small     businesses,     mostly 
shops.     Number,  640,000;  aggregate  earnings, 
^"66,000,000;  average  earnings  per  head,  ^103. 

(2)  Farmers  not  subject  to  income-tax.   Num- 
ber, 360,000;*  aggregate  earnings.  ^34,000,000; 
average  earnings  per  head,  ^95. 

(3)  Persons  engaged  in  professional  or  quasi- 
professional    work — e.g.,   government   officials, 
business  clerks  and  agents,  and  officers  in  the 
army,  navy  and  mercantile  marine.     Number, 
1,300,000;  aggregate  earnings,  ^120,000,000; 
average  earnings  per  head,  ^92. 

To  the  earnings  of  these  groups  must  be 
added  about  /i^3O,ooo,ooo2  from  investments, 
thus  bringing  up  the  total  income  to  the  amount 
that  has  just  been  stated. 

The  remaining  persons  (including  about  10 
per  cent,  of  independent  workers)  and  the 
remaining  income,  will  correspond  to  what  is 
commonly  understood  by  the  labouring  classes 
and  their  wages.  The  number  of  these  persons 
will  be  about  16,500,000,  and  their  aggregate 

1.  This  number  is  reached  by  a  collation  of  the  figures 
given  in  the  Report  here  referred  to,  with  those  given  in 
the  Census  of  Agricultural  production. 

2.  See  Income  Tax  Returns  for  1910,  under  the  heading 
of  small  incomes,  "reviewed"  and  then  "exempted." 


Chap.  II.]  WAGE-EARNERS  »33 

income  about  ,£1,050,000,000,  of  which 
^20,000,000  is,  however,  interest  on  invest- 
ments. The  earned  income  or  the  wage-income 
of  these  16,500,000  persons  will  be  accordingly 
,£1,030,000,000,  which  means  a  general  average 
per  head  of  £62  a  year,  or  235.  nd.  a  week. 

But  though  such  would  be  the  income  of  each 
wage-earner   if    wages   were    divided    equally, 
they  are  not  so  divided ;  and  for  this  there  is  a 
very  obvious  reason — that,  in  certain  respects  at 
all    events    the    wage-earners   are    themselves 
unequal.     Some  of  them  are  boys  and  girls 
under  eighteen  years  of  age,  and  whilst  most 
of  the  adults  are  men,   a   large  number  are 
women.     The   non-adults  naturally  earn   less 
than  the  adults.     The  women  on  the  whole  earn 
less  than  the  men.     These  facts  are  notorious, 
and  recent  information  enables  us  to  state  them 
in  specific  form.     If  we  take  the  average  of 
weekly   earnings   per  head  in   each  of   these 
groups  separately,  they  will  be  los.  for  girls, 
135.  6d.  for  boys,  and  I2S.  6d.  for  non-adults 
as  a  whole.     They  will  be  i8s.  for  women,  and 
305.  for  men.     Farther,  out  of  a  total  working 
body  of  sixteen  and  a  half  millions,  the  non- 
adults  account  for  about  one-sixth,  or  2,700,000 
persons,  and  the  adults  for  about  13,800,000, 
of  whom  4,300,000  are  women,  and  9,500,000 
are  men.     Thus,  whilst  the  average  of  annual 
earnings  for  all  these  workers  together  is  £62 
a  year,  this  resolves  itself  into  ,£33  for  about 
one-sixth    of    the    number — namely    the    non- 
adults;  ,£47  for  about  one-fourth — namely  the 


134  WAGE-EARNERS  [Book  III. 

women;  and  ^77  for  about  two-thirds — namely 
the  men. 

Such  approximately  are  the  broad  results 
disclosed  by  an  examination  of  the  latest  Board 
of  Trade  enquiries  into  wages,  of  the  census  of 
the  population  in  so  far  as  it  relates  to  employ- 
.ments,  and  of  the  more  detailed  figures  given 
in  the  Census  of  Production  as  to  the  number 
of  men,  women,  boys  and  girls  engaged  in  each 
of  the  industries  with  which  that  work  deals. 

But  even  this  analysis  is  insufficient  for  our 
present  purpose.  Let  the  averages  for  non- 
adults  and  for  grown-up  men  and  women  be 
respectively  what  they  may,  it  is  constantly 
urged  by  reformers,  when  such  averages  are 
quoted,  that  in  each  of  these  cases  a  certain 
•number  of  persons  will  be  earning  more  than 
the  average,  and  others  at  the  bottom  of  the 
scale  will  be  earning  very  much  less.  Thus 
two  women  may  be  earning  an  average  of 
^47  a  year  each,  or  ^94  between  them;  but 
the  one  may  be  a  skilled  milliner  who  earns 
,£70,  and  the  other  a  common  sempstress  who 
earns  only  ^24.  Two  men  may  be  earning 
6os.  a  week  between  them,  and  it  is  true  to  say 
that  on  an  average  each  of  them  is  earning  305. ; 
but  in  reality  the  one  may  be  an  engineer  whose 
share  is  455.,  and  the  share  of  the  other,  who  is 
a  stone-breaker,  may  be  no  more  than  155. 
Thus  general  averages  as  to  wages  may  suggest 
a  diffused  prosperity,  and  at  the  same  time  may 
cover,  although  in  a  sense  correct,  a  vast 
diffusion  of  poverty  and  even  of  extreme  want. 


Cbap.  II.J  "  HALF-TIMERS  "  Hf 

And  this  argument,  although  the  results  of  its 
application  are  by  most  reformers  exaggerated 
to  an  extreme  degree,  is  true.  If  we  wish  to 
discover  from  an  examination  of  current  wage- 
rates  what  the  practical  distribution  of  income 
amongst  the  wage-earning  classes  is,  we  must 
take  some  dividing  limit  above  and  below 
which  adequate  wages  and  inadequate  are 
respectively  admitted  to  begin.  Such  a  limit 
is,  for  purposes  of  general  controversy,  now 
taken  by  most  reformers  as  255.  a  week — a  limit 
which  is  apparently  quoted  with  reference  to 
adults  only,  and  more  especially  to  adult  males. 
We  will,  therefore,  adopt  it  in  this  sense  here, 
and  proceed  to  consider  how  many  men  and 
women  earn  more  and  less  than  the  critical  sum 
in  question. 

Let  it  first,  then,  be  noted  with  regard  to  the 
non-adults  (of  whom  a  few  are  "  half-timers  " 
earning  55.  a  week,  whilst  an  appreciable 
minority  earn  from  155.  up  to  i8s.),  that  the 
average  for  the  whole  being  125.  6d.,  the  annual 
earnings  of  the  whole  will  be  approximately 
^"90,000,000,  whilst  their  number,  as  has  been 
said  already,  is  2,700,000.  Thus  the  aggregate 
annual  earnings  of  the  adults  will  be 
^"940,000,000,  of  whom  4,300,000  are  women, 
and  the  remainder,  9,500,000,  are  men. 

Let  us  first  take  the  earnings  of  the  women. 
It  was  observed  in  an  earlier  chapter  with 
reference  to  incomes  at  the  beginning  of  the 
nineteenth  century  that  not  many  women  even 
to-day  earn  more  than  225.  a  week.  The 


136  MALE  WAGE-EARNERS  [Book  III. 

number  of  those  earning  more  than  255.  is 
naturally  smaller  still.  It  is,  however,  not 
inappreciable.  It  appears  that  the  mass  of  the 
women  workers  earn  from  145.  a  week  up  to 
175.  6d. ;  that  at  the  bottom  of  the  scale  there  is  a 
residuum  or  "  submerged  tenth/'  barely  earning 
half  that  sum;  and  that  at  the  top,  there  is  a 
sixth,  whose  earnings  range  from  2 is.  up  to  as 
much  as  305.,  but  who,  if  taken  together  as  one 
superior  class,  will  not  on  an  average  earn  more 
than  275.  or  26s.  The  aggregate  earnings  of 
the  women  are  about  ^200,000,000. 

Let  us  now  turn  to  the  men — to  the  army  of 
adult  male  bread-winners — who  in  respect  not 
only  of  their  numbers,  but  also  of  their  position 
and  the  amount  of  their  earnings,  are  the  main 
determining  factor  in  the  welfare  of  the  wage- 
paid  population. 

The  total  number  of  these  males  is,  as  has 
been  said  already,  about  9,500,000.*  The 

i.  These  figures  are  dealt  with  in  detail,  and  presented 
in  a  series  of  Tables  in  "Statistical  Monographs,"  19,  21, 
3°>  35-  The  trades  or  industries  dealt  with  comprising 
agriculture,  maintenance  of  rural  roads,  maintenance  of 
urban  roads,  linen  and  jute  trades,  silk,  cotton,  wool, 
hosiery,  millinery,  boots,  and  all  clothing  trades,  as  well 
as  all  textiles;  pig  iron,  iron  and  steel,  engineering,  ship- 
building, tin  plate,  light  castings,  railway  wagons,  electric 
lighting,  gas,  tramways,  and  water.  See  Board  of  Trade 
Yellow  Books  on  agriculture,  clothing  trades,  textile 
trades,  metal  trades,  and  public  utility  services.  The 
recent  Analytical  Tables  of  Earnings  which  have  been  used 
are  those  relating  to  persons  working  for  normal  hours, 
i.e.,  not  those  working  overtime,  or  only  for  a  portion  of 
the  normal  working  day. 


Chap.  II.J  WAGE-EARNERS  137 

average  earnings  per  head  are,  it  has  been  said 
also,  about  305.  a  week  (in  strictness  a  little 
less),  or  in  other  words  about  £yj  a  year;  and 
the  aggregate  earnings  of  the  whole  amount  in 
round  figures  to  ^740,000,000. 

Such  being  the  case,  it  appears  from  a  minute 
examination  of  the  evidences  that  the  number 
earning  more  than  255.  a  week  is  about 
6,500,000,  that  their  weekly  average  per  head  is 
335.  6d.,  that  their  annual  average  is  ^88,  and 
that  the  aggregate  of  such  earnings  for  the  year 
is  a  trifle  in  excess  of  ^570,000,000.  Of  the 
3,000,000  adult  males  remaining,  it  appears 
that  the  aggregate  earnings  for  the  year  are 
nearly  £  170,000,000^  and  that  their  weekly 
average  per  head  is  2 is.,  and  their  annual 
average  about  ^54. 

Now  in  the  numerical  proportion  borne  by 
the  richer  of  these  two  groups  to  the  poorer 
there  is  nothing  perhaps  very  different  from 
what  the  majority  of  persons  might  expect;  but 
the  average  rate  of  earnings  in  the  one  case 
differs  so  greatly  from  the  average  rate  in  the 
other,  that  it  is  desirable  to  illustrate  the  matter 
by  a  few  particular  instances. 

Let  us  begin  with  two  of  the  cases  in  which 
the  average  rate  of  earnings  for  all  adult  males 
is  at  its  lowest,  namely,  the  maintenance  of 
rural  roads  and  the  jute  trade. 

For  those  employed  in  the  maintenance  of 
rural  roads,  the  general  average  is  i8s.  a  week; 
but  for  the  small  minority  who  earn  more  than 

i.   This  will  include  a  fraction  from  invested  capital. 


138  METAL  TRADES  [Book  III. 

255.    the    average    rate    is    315.;    and    for   the 
majority  who  earn  less  it  is  175. 

In  the  jute  trade  the  general  average  is  2 is.; 
but  the  average  for  the  richer  minority  is  315., 
as  in  the  case  of  rural  roads ;  but  for  the  poorer 
majority  it  is  203. 

In  the  cotton  trade  the  general  average  is 
28s.  6d. ;  but  for  the  richer  group,  which  in  this 
case  forms  60  per  cent,  of  the  whole,  the  average 
is  nearly  335. ;  for  the  poorer  minority  it  is,  as 
in  the  case  of  the  jute  trade,  2os. 

In  the  great  metal  trades — tin-plate,  iron  and 
steel,  ship-building,  pig  iron  and  engineering— 
the  general  averages  are  415.,  365.,  335.,  325., 
and  3  is.  respectively;  but  for  the  large 
majorities  earning  more  than  255.  a  week — and 
in  these  trades  they  constitute  about  80  per 
cent,  of  the  whole — the  respective  averages  are 
475.,  495.,  375.,  395.  and  355.;  whilst  for  the 
poorer  minorities  the  averages  range  from  2 is. 
to  22s.,  being  not  much  higher  than  the  average 
in  the  case  of  cotton. 

Indeed  throughout  the  whole  field  of  wage- 
paid  industry  (with  the  exception  of  agricultural 
and  casual  urban  labour)  the  same  fact  presents 
itself.  The  adult  males  earning  less  than  255. 
a  week  earn  approximately  the  same  in  one  case 
as  they  do  in  another,  and  the  great  variations 
manifested  by  the  averages  for  adult  males  as 
a  whole  are  due  to  the  groups  whose  earnings 
exceed  that  limit — partly  because  of  the  amounts 
which  their  members  earn  per  head,  but  mainly 
because  of  the  number,  in  ca<"h  casr.  of  this 


LAap.  II.J     WAGES  IN  ALL  INDUSTRIES  139 

higher  rank  of  workers  as  compared  with  the 
number  of  the  lower.  The  principal  trades  in 
which  the  proportion  of  the  former  to  the  latter 
is  greatest  are  coal-mining,  all  industries  con- 
nected with  iron  and  steel  and  other  metals,  the 
building  industries  (wood-work,  plumbing  and 
decoration  included),  and  the  public  utility 
services  such  as  gas,  electric  lighting,  and  tram- 
ways ;  to  which,  strange  as  it  may  seem,  must  be 
added  all  the  clothing  trades.  Of  the  adult 
males  working  in  these  latter  industries  the 
proportion  earning  more  than  255.  a  week  ranges 
from  76  to  86  per  cent.1 

If,  however,  all  the  industries  of  the  country 
are  taken  together,  such  proportions  are  reduced, 
mainly  by  the  agricultural,  casual  and  certain 
textile  workers,  to  about  68  per  cent. ;  or,  in 
other  words,  as  has  been  said  already,  out  of 
nine  and  a  half  million  adult  male  wage-earners, 
about  six  and  a  half  millions  earn  more  than 
255.  a  week,  and  the  number  of  those  who  earn 
kss  is  about  3,000,000. 

Let  us  now  take  all  the  workers  together, 
and  consider  what  in  a  general  way,  the  facts 
just  stated  mean.  The  number  of  such  per- 
sons, if  non-adults  be  included,  is  about 
16,500,000;  and  if  all  these  persons  are  treated 

i.  The  percentage  of  males  in  the  millinery  trade  earn- 
ing more  than  403.  a  week  is  higher  than  in  any  other, 
being  69  per  cent.  In  the  lace  trade  it  is  54.  The  percent- 
ages of  those  earning  more  than  353.  a  week  in  the 
tnillinery  trade,  the  lace  trade,  and  the  hat  trade  are  72, 
^,  and  50.  The  percentages  earning  more  than  353.  a 
week  are  85,  84,  and  83. 


140  FAMILIES  [Book  ill. 

as  separate  units,  and  everybody  is  called  poor 
who  earns  less  than  255.  a  week,  reformers  may 
say  with  truth  that,  despite  all  alleged  progress, 
more  than  half  of  the  wage-earners  remain 
below  the  poverty  limit  to-day. 

But  as  purporting  to  represent  the  concrete 
facts  of  life,  such  a  statement  would  be  true 
on  one  supposition  only — the  supposition  that 
every  wage-earner  was  an  absolutely  isolated 
animal,  sleeping,  cooking  its  meals,  and  eating 
its  meals  in  solitude.  Such,  however,  is  not 
the  case.  The  wage-earners,  like  the  majority 
of  human  beings  of  all  ranks  live  not  alone, 
but  in  families.  Let  us  endeavour  to  see,  with 
some  approach  to  precision,  how  this  fact  affects 
the  wage-earners  of  the  United  Kingdom.  The 
average  family  is,  by  most  statisticians,  taken 
as  five  persons;  and  the  correctness  of  this 
estimate  would  appear  to  be  borne  out  by  the 
circumstance  that  to-day  in  the  United  Kingdom 
there  are  9,000,000  occupied  houses  or  tene- 
ments, which,  if  we  allow  five  occupants  to  each 
will  give  us  a  total  of  45,000,000  persons — a 
number  almost  exactly  equal  to  that  of  the 
present  population.  Account  must  be  taken, 
however,  of  a  certain  disturbing  factor,  namely 
the  existence  of  domestic  servants.  These,  to 
the  number  of  some  two  and  a  half  million, 
inhabit  the  houses  of  their  employers,  and  are 
thus  abstracted  from  their  own  family  groups. 
If  then  we  assume,  as  we  reasonably  may,  that 
their  employers  are  the  1,400,000  persons 
subject  to  income-tax,  each  of  them  represent- 


Chap.  II.]  WAGE-EARNERS  141 

ing  on  an  average  a  natural  iamily  of  five,  and 
each  family  occupying  a  separate  house,  the 
addition  to  their  households  of  this  number  of 
servants  will  raise  the  number  of  occupants  per 
house  in  this  special  group  from  the  natural 
average  of  five  to  an  average  of  approximately 
seven;  and  the  population  contained  in  them 
will  be  about  1 0,000,000.  F  arther,  if  with  regard 
to  the  families  of  the  lower  middle  classes,  we 
assume  that  these  are  neither  augmented  by  the 
presence  of  servants,  nor  reduced  by  supplying 
them,  but  conform  to  the  natural  average  of 
five  persons  to  a  family,  these  may  be  taken  as 
representing  a  total  population  of  5,000,000, 
and  as  occupying  1,000,000  separate  houses  or 
tenements. 

Here  then  are  2,400,000  houses,  and  a  popu- 
lation of  15,000,000  persons,  which  being 
eliminated,  leave  us  with  6,600,000  houses  on 
the  one  hand,  and  a  population  of  30,000,000 
persons  on  the  other,  by  whom  the  houses  are 
occupied  at  the  average  rate  of  4^  persons 
to  a  house.  These  30,000,000  persons  will 
consist  of  the  remaining  wage-earners  and  their 
families.  The  actual  wage-earners  (non-adults 
included),  after  the  deduction  of  two  and  a 
half  million  servants,  will  number  14,000,000; 
and  if  with  regard  to  the  servants  we  make 
these  three  assumptions — that  the  males  are 
taken  from  the  men  earning  more  than  255. 
a  week,  that  three-fourths  of  the  females  are 
women,  and  one-fourth  girls — the  composi- 
tion of  this  body  of  14,000,000  wage-earners 


14*  WAGE-EARNERS'  HOUSEHOLDS      [Book  III. 

will,  in  respect  of  their  earnings,  be  as  follows. 
There  will  be  6,000,000  men  earning  more 
than  255.  a  week;  there  will  be  3,000,000  men 
earning  less;  there  will  be  3,200,000  women  and 
1,800,000  non-adults,  all  of  them  earning  less 
than  255.  a  week  likewise;  and  if  we  suppose 
the  whole  body  to  have  been  called  out  for 
inspection  from  their  6,600,000  houses,  the 
members  of  the  richer  group  wearing  white 
clothes,  and  those  of  the  poorer  black,  the  num- 
ber of  the  whites  would  be  six,  and  the  number 
of  the  blacks  would  be  eight,  million;  and  the 
ordinary  agitating  reformer,  having  such  a 
spectacle  before  him  would  at  once  say  that 
here  was  an  answer  to  the  question  of  how 
wealth  is  really  distributed  amongst  the  wage- 
earning  classes  of  to-day. 

This  is  really  no  answer  at  all ;  for  a  spectacle 
such  as  that  which  we  have  imagined  would  not 
present  to  us  even  the  rudiments  of  the  real 
question.  The  primary  fact  to  be  borne  in 
mind  is  this — that  these  millions  of  wage- 
earners  all  of  them  live  in  houses,  that  if  they 
did  not  live  in  houses  they  would  die,  and  that 
the  number  of  houses  in  which  as  a  fact  they 
do  live  is  nearly  one-half  of  the  number  of  the 
labourers  themselves.  This  means  that,  on  an 
average,  the  wage-earners  live  in  couples — that 
there  are  on  an  average  two  of  them  to  every 
working  household;  and  that  the  character  of 
the  life  lived  within  the  household  walls 
depends  practically  on  the  joint  earnings  of 
both. 


Chap.  II.]          INDIVIDUAL  EARNINGS  143 

This  is  no  speculative  statement.  It  is 
a  statement  the  truth  of  which  is  illustrated  and 
substantially  attested  by  the  bricks  and  mortar 
of  the  6,600,000  houses  in  which  the  masses  of 
the  wage-earning  population  of  this  country 
pass  their  lives;1  and  if  all  the  wage-earners 
earned  the  same  amount,  the  result  would  be 
very  simple.  Every  household  income,  on  an 
average,  would  be  double  the  income  earned 
by  each  of  its  working  members.  Servants  and 
their  wages  being  deducted,  the  masses  of  the 
wage-paid  workers  would  earn  between  them 
^930,000,000  a  year,  or  ,£66  per  head ;  and  the 
income  of  every  household  would  be  ^132. 

But  individual  earnings,  as  we  have  seen, 
differ.  For  one  group  the  average  is  /88  a 
year,  for  another  it  is  ^54,  for  another  it  is  ^47, 
and  for  another  it  is  ^33 ;  the  number  of  persons 
in  the  groups  are  very  unequal  likewise;  and 
how  they  and  their  earnings  can  be  combined 
into  7,000,000  couples,  one  couple  on  an 
average  being  allotted  to  every  household,  is 
a  problem  of  which  no  solution  is  even  arith- 
metically possible  which  will  coincide  with  the 
arrangement  suggested  by  a  consideration  of 
the  units  separately. 

The  situation  will,  perhaps,  be  more  easily 
grasped  by  the  reader  if  we  reduce  our  figures, 

i.  Compare  these  figures  with  columns  3  to  7  in  table  i, 
TO!,  vi,  of  Census  of  England  and  Wales,  1911,  dealing 
with  "Buildings  of  various  kinds."  The  figures  given  in 
the  text  are  the  approximate  figures  for  the  United 
Kingdom. 


144  A  STATISTICAL  PUZZLE         [Book  III. 

in  respect  of  persons  and  houses  so  as  to 
deal  with  hundreds  and  with  tens  instead  of 
millions  and  hundreds  of  thousands.  Let  us 
suppose,  then,  that  the  wage-earners,  other  than 
domestic  servants,  are  140  in  number  instead  of 
14,000,000,  and  that  the  houses  or  separate 
tenements  which  we  know  them  as  a  fact  to 
be  domiciled  are,  not  nearly  7,000,000  in  num- 
ber, but  7O.1  Now  matters  being  represented 
on  this  reduced  scale,  the  140  wage-earners 
will,  in  accordance  with  what  we  have  seen 
already,  be  made  up  of  60  men  who  on  an 
average  earn  ^"88  a  year,  of  30  men  who  earn 
^54,  of  32  women  who  earn  ,£47,  and  of  18  non- 
adults  who  earn  ^33 ;  and  we  may  suppose  that 
these  persons  are  140  little  dolls,  which  represent 
so  many  different  incomes,  and  with  which  we 
have  to  play  a  puzzle-game,  the  object  being  to 
fit  these  dolls  in  couples  into  70  little  toy  houses, 
in  such  a  manner  as  to  produce  some  prescribed 
result. 

If  the  puzzle  were  set  by  an  optimist,  the 
prescribed  result  would  be  so  to  arrange  these 
couples  that  the  joint  incomes  represented  by 
them  should  as  nearly  as  possible  be  equal. 
If  the  puzzle  were  set  by  a  pessimist — by  Mr. 
Snowden  or  any  other  reformer,  who  desires  to 
paint  the  present  in  the  darkest  hues  which  the 
colour-box  of  imaginable  possibilities  affords — 

i.  The  correct  number  would  of  course  be  66;  but  by 
slightly  raising  this,  the  process  of  calculation  is  simpli- 
fied, and  the  general  character  of  the  results  not  substan- 
tially altered. 


Chap.  II.]  PROBABLE  RESULT  145 

the  proposed  result  would  be  so  to  arrange  the 
dolls  as  to  couple  all  those  representing  the 
smallest  incomes  together,  and  thus  fill  with 
poverty  the  largest  number  of  houses. 

Such  is  the  game  (if  the  word  may  be  used 
inoffensively)  which  the  reformers  play  them- 
selves. Let  us  consider  the  utmost  lengths  to 
which  in  the  present  case  it  can  carry  us.  The 
darkest  result  would  be  reached  by  beginning 
with  the  non-adults — 18  in  number,  and  assign- 
ing them  in  nine  couples  as  the  sole  bread- 
winners to  nine  out  of  the  70  houses;  then  to 
treat  the  32  women  likewise,  assigning  them, 
in  1 6  couples,  as  the  sole  bread-winners  to  16 
houses;  and  then  to  take  the  30  men  earning 
less  than  255.  a  week,  and  assign,  them  in  15 
couples,  as  the  sole  bread-winners  to  15  houses 
more.  In  this  way  we  shaii  get  40  households, 
of  which,  if  we  take  them  together,  the  average 
income  will  be  ^88  per  household ;  and  the  only 
persons  left  will  be  60  men  earning  more  than 
255.  a  week,  their  annual  average  being  ,£88 
per  head.  These  similarly  we  must  combine 
into  30  couples,  and  assign  them  as  sole  bread- 
winners to  the  30  houses  remaining. 

Here  is  a  result  which  is  at  all  events  arith- 
metically possible;  and  if  it  were  translated 
into  the  language  current  on  radical  or  socialist 
platforms,  it  would  have  a  very  familiar  and  at 
the  same  time  a  striking  sound.  "  Even  if 
some  of  the  working-classes,"  we  may  imagine 
Mr.  Snowden  saying,  "  are  moderately  well-to- 
do,  these  are  but  a  favoured  minority.  Only 


MO  WAGE-EARNERS  [Book  III. 

40  per  cent,  of  our  working-class  families  to-day 
are  supported  on  household  incomes  exceeding 
£100  a  year;  whilst  60  per  cent,  live  on  incomes 
which  are  not  only  below  that  limit,  but  which 
are,  if  measured  by  averages,  not  more  than 
one-half  of  the  incomes  that  rise  above  it." 

But  the  distribution  of  wage-earners  which 
would  justify  such  a  statement,  although 
possible  as  a  matter  of  arithmetic,  is  absolutely 
inconsistent  with  what  we  know  as  to  concrete 
facts.  We  know,  without  consulting  statistical 
records  that  all  the  non-adult  workers — those 
whose  earnings  are  lowest — are  not  in  reality 
grouped  together  in  couples  so  as  to  form  the 
sole  bread-winners  of  any  one  class  of  house- 
holds. We  know  also  the  same  thing  as  to 
women;  and  definite  statistics  confirm  what 
common  sense  and  observation  tell  us.  In 
Part  I  of  the  Report  on  the  Census  of  1851,  a 
most  interesting  section  is  devoted  to  the  treat- 
ment of  this  very  question.  It  is  there  show* 
from  an  examination  of  a  large  number  of 
representative  families  th**  there  is  one  adult 
male  at  least  in  each  of  every  six  families  out 
of  seven;  and  this  fact  alone  would  compel  us 
to  reconstruct  the  scheme  of  distribution  which 
has  been  mentioned  as  not  arithmetically  impos- 
sible. Instead  of  crowding  the  whole  of  our 
90  adult  males  into  45  houses  at  the  rate  of 
two  per  household  (thirty  of  these  households 
belonging  to  a  conspicuously  favoured  minority) 
we  shall  have  to  distribute  60  of  them  amongst 
60  houses  at  the  rate  of  one  per  household;  and 


Chap.  II.]  AND  HOUSEHOLDS  147 

the  women  and  the  non-adults,  however  they 
may  be  distributed  actually,  must  at  all  events 
be  distributed  somehow,  and  not  left  together 
at  the  bottom  of  the  scale  like  a  sediment. 
There  are  various  ways  in  which,  without 
violating  these  conditions,  our  140  wage-earners 
might  conceivably  be  combined  into  couples, 
and  got  into  our  70  houses.  The  reader  may 
find  it  amusing  to  work  them  out  for  himself. 
It  is  enough  here  to  say  that  if  ^100  a  year  be 
taken  as  a  standard  household  income  there  is 
no  credible  arrangement  of  the  70  couples  in 
question  according  to  which  the  incomes  of  less 
than  half  of  them  would  conspicuously  exceed 
that  standard,  and  the  incomes  of  more  than  a 
half  conspicuously  fall  below  it.  Let  us  only 
assign,  as  a  beginning,  one  adult  male  per  house 
to  60  houses  out  of  our  70,  and  in  whatever  way 
we  may  dispose  of  the  80  wage-earners  remain- 
ing there  will  be  60  household  incomes  exceed- 
ing £100,  and  not  more  than  10  below  it. 
Between  these  two  groups  of  incomes  the 
difference  will  be  very  striking,  the  average  in 
the  case  of  the  former  being  greater  by  60  or 
perhaps  by  70  per  cent,  than  the  average  in  the 
case  of  the  latter.1  From  each  average  in 
i.  In  an  interesting  article  on  "Wages,"  in  vol.  xxxiii 
of  The  Times  edition  of  the  Encyclopaedia  Britannica,  the 
writer  notes  that  wages,  under  modern  conditions,  show  a 
tendency  to  "cluster"  round  two  points — 325.  to  353.  a 
week  on  the  one  hand,  and  ais.  to  aas.  on  the  other. 
These  figures  refer  to  the  close  of  the  nineteenth  century, 
and  confirm  those  given  in  the  text,  which  are  based  on 
independent  and  later  data. 


148  HOUSEHOLD  INCOMES  [Book  III. 

reality  there  will  of  course  be  individual  diver- 
gencies. Of  the  household  incomes  which 
exceed  ^100  a  year,  many  will  exceed  that  sum 
by  a  very  small  amount ;  others  will  be  as  much 
as  ^250  or  more.  Of  household  incomes  which 
are  less  than  ,£100,  some  will  be  as  much  as 
,£90,  others  not  more  than  ,£50,  whilst  in  both 
groups  there  will  be  a  minority  of  solitary 
workers,  of  whom  those  earning  as  much  as  the 
individual  average  will  be  few,  and  those 
earning  less  will  be  relatively,  if  not  absolutely, 
numerous.  Could  all  these  facts  be  identified 
and  proper  allowance  made  for  them,  any 
statement  which  in  general  terms  is  possible, 
would  call  no  doubt  for  many  important  quali- 
fications; but  a  general  statement  is  sufficient 
for  our  present  purposes;  and  it  may  be  said 
with  confidence  as  to  the  14,000,000  wage- 
earners  who  are  not  in  domestic  service,  but 
occupy  independently  nearly  7,000,000  houses, 
that  at  least  four-fifths  of  them  belong  to  a 
well-marked  superior  class  in  which  the  average 
household  income  is  about  ^140,  ^100  being 
the  minimum;  and  that  one-fifth  (which  means 
a  population  of  about  6,000,000  individuals  out 
of  30,000,000)  belong  to  a  class  equally  well- 
marked,  in  which  the  average  household  income 
is  approximately  ^75  or  ^80,  and  £100  is  the 
maximum. 

Neither  for  these  summary  statements,  nor 
for  the  analytical  figures  preceding  them,  can 
it  be  claimed  that  their  accuracy  is  more  than 
approximate,  or  for  general  purposes  substan- 


Chap.  II.]      THE  REFORMER'S  FIGURES  140 

tial.  In  this  respect  they  resemble  the  block 
plans  of  buildings  as  shown  on  a  map  the  scale 
of  which  is  (let  us  say)  24  inches  to  a  mile.  On 
such  a  map  the  respective  shapes  and  sizes  of 
the  manor  house,  the  farm  houses,  and  the 
cottages,  would  be  shown  with  a  precision  which 
for  general  or  comparative  purposes  was  suffi- 
cient, though  they  would  be  of  small  use  to  a 
builder  in  contracting  for  the  alteration  or 
repair  of  any  particular  structure.  The  fore- 
going figures  and  summaries  possess,  it  may  be 
safely  said,  at  least  such  an  accuracy  as  this; 
and  widely  as  they  differ  in  many  respects  from 
the  statements  of  the  ordinary  reformer,  they 
are,  if  taken  as  a  whole,  confirmed  in  a  remark- 
able way  by  figures  which  reformers  themselves, 
though  not  realising  their  cumulative  signifi- 
cance, are  accustomed  to  quote  as  indubitable. 
One  instance  of  this  fact  will  be  enough.  In 
the  course  of  a  Parliamentary  debate  on  the 
condition  of  the  wage-earning  classes — a  debate 
suggested  by  certain  then  recent  strikes — a 
prominent  labour-member,  who  was  the  prin- 
cipal speaker  on  the  occasion,  having  contended 
that  the  condition  of  these  classes  was  one  of 
increasing  misery,  enlarged  on  the  additional 
hardships  entailed  on  them  by  the  strikes  in 
question;  and  the  climax  of  his  argument  was 
an  estimate  of  the  actual  total  of  wages  which, 
owing  to  these  strikes,  had  been  lost  by  them 
in  a  few  short  weeks.  The  actual  amount 
quoted  by  him  does  not  concern  us  here.  It  is 
interesting  only  on  account  of  the  basis  on  which 


ISO  WAGES  AND  HOUSEHOLDS      [Book  in. 

it  was  estimated.  That  basis  was  the  assump- 
tion that  for  wage-earners  of  all  grades  the 
average  weekly  wage-rate  is  245.  per  head. 
This  sum  is  slightly  in  excess  of  the  average 
which  has  been  given  here ;  but  the  two  are,  for 
practical  purposes,  identical.  The  annual 
earned  income  of  the  wage-paid  workers  as  a 
whole,  computed  on  this  basis,  is  ;£  1,030,000,000. 
If  we  add  to  this  the  earnings  of  the  lower 
middle  classes — about  £ 2  2 0,000,000 — together 
with  a  farther  sum  of  ^"50,000,000  from  invest- 
ments (which  is  ear-marked  in  the  reports  of 
the  Commissioners  of  Inland  Revenue  as  going 
to  persons  not  subject  to  income-tax)  we  reach 
the  grand  total  of  ^1,300,000,000  as  the 
aggregate  income  of  the  18,800,000  persons, 
none  of  whose  incomes  individually  amount  to 
more  than  ,£160  a  year;  and  this  sum,  though 
not  purporting  to  be  exact,  may  therefore  be 
accepted  as  not  open  to  serious  dispute. 

Such  being  the  case,  it  will  be  seen  from  the 
details  already  given,  that  servants  and  their 
wages  being  excluded,  about  £  1,2 00,000,000 
is  divided  amongst  some  8,000,000  households, 
each  household  on  an  average  containing  two 
working  members;  that  about  1,000,000  of  these 
are  households  of  the  lower  middle  classes,  the 
average  household  income  being  about  ^200; 
that  about  6,000,000  are  households  of  the 
richer  section  of  wage-earners,  the  average 
household  income  being  about  ,£145;  and  that 
about  1,000,000  are  households  of  the  poorer 
section  of  wage-earners,  the  average  household 


Cfcap.  II.]       WAGES  AND  HOUSEHOLDS  131 

income  being  about  ^75  or  £So,  though  the 
actual  household  income  will  vary  in  various 
cases  from  anything  under  ,£100  down  to  some- 
thing barely  sufficient  for  the  primary  needs  of 
life. 

From  the  income  of  "  the  poorer  classes " 
as  a  whole,  we  will  now  turn  to  that  of  the 
"  richer " — namely  of  those  persons  whose 
incomes  are  in  excess  of  ^i  60  a  year,  and  being 
thus  subject  to  income-tax  are  directly  dealt 
with  in  the  Reports  of  the  Commissioners  of 
Inland  Revenue. 


CHAPTER   III 

IN  dealing  with  the  income  of  the  richer  classes, 
as  in  dealing  with  that  of  the  poorer,  the  main 
points  to  be  considered  are  firstly  the  total  that 
is  distributable,  secondly  the  number  of  the 
recipients,  and  thirdly  the  division  of  these  last 
into  groups,  according  to  the  magnitude  of  the 
incomes  comprised  by  each. 

The  total  amount,  and  the  total  number  of 
the  recipients,  have  both  been  stated  provi- 
sionally, and  in  general  terms,  already.  Each 
of  these  questions  shall  be  now  reconsidered, 
and  the  statements  made  with  regard  to  them 
shall  be  explained  in  detail  and  verified.  We 
will  begin  with  the  total  of  net  private  incomes, 
in  excess  of  ^160  a  year,  as  shown  by  a  colla- 
tion of  the  income-tax  returns  for  the  year  1910 
with  certain  information  which  has  been  pro- 
vided by  the  Census  of  Production  since  these 
returns  were  issued. 

The  total  amount  reviewed  in  the  year  1910, 
for  the  purpose  of  ascertaining  the  aggregate 
of  such  private  incomes,  was,  as  we  have  seen, 
;£  i, 045, 000,000.  We  have  seen  also  that,  out 
of  this  total,  the  amount  recognised  by  the  Com- 
missioners as  being  either  not  income  of  any 
kind,  or  not  consisting  of  incomes  exceeding 
,£160  a  year,  was  ^225,000,000.  This  amount 
was  made  up  of  ^75,000.000  (or  33*3  per  cent.) 

152 


Chap.  1II.1     INCOME  OF  RICHER  CLASSES  153 

in  respect  of  over-assessments;  of  ^71,000,000 
(or  315  per  cent,  in  respect  of  small  incomes 
and  incomes  of  charities);  of  £  12, 000,000  (or  5 
per  cent.)  in  respect  of  insurances;  and  of 
,£67,000,000  (or  29-2  per  cent.)  in  respect  of 
upkeep.  These  items,  which  are  called  the 
statutory  deductions,  amount,  as  has  been  said 
already,  to  ^225,000,000;  but,  in  order  to 
understand  more  fully  their  nature  and  their 
precise  incidence,  it  is  necessary  to  note  that  the 
"  gross  amount  reviewed  "  is  classified  into  five 
portions,  in  accordance  with  their  respective 
sources. 

The  first  of  these  (Schedule  A)  comprises  the 
rent  of  agricultural  land,  of  the  sites  of  build- 
ings, and  of  the  buildings  as  such.  The  "gross 
amount  reviewed "  was  ^276,000,000.  The 
deductions  were  ^62,000,000  in  respect  of  over- 
assessments,  small  incomes,  income  of  charities, 
and  insurances;  and  ^42,000,000  in  respect  of 
upkeep. 

The  second  portion  (Schedule  B)  comprises 
the  profits  of  farmers.  The  gross  amount 
reviewed  was  ^17,000,000.  The  deductions 
were  ^12,000,000,  almost  entirely  in  respect 
of  small  incomes. 

The  third  portion  (Schedule  C)  comprises 
interest  on  government  stock,  home  and  foreign. 
The  gross  amount  reviewed  was  ^49,000,000. 
The  deductions,  mainly  in  respect  of  small 
incomes  and  charities,  were  ,£3,600,000. 

The  fourth  portion  (Schedule  D)  comprises 
all  gains  arising  from  professions  and  busi- 


t$4  TAXED   INCOMES  [Book  III. 

nesses,  other  than  the  salaries  of  employees. 
The  gross  amount  reviewed  was  ^557,000,000. 
The  deductions  were  ,£46,000,000  in  respect  of 
over-assessments;  ^21,000,000  in  respect  of 
small  incomes,  charities,  and  insurances;  and 
j£2 5, 000,000  in  respect  of  upkeep  of  trade 
premises,  machinery,  shipping,  and  industrial 
plant  generally. 

The  fifth  portion  (Schedule  E,  and  a  small 
part  of  D)  comprises  the  salaries  of  employees 
of  private  business  houses,  business  companies 
and  the  State.  The  gross  amount  reviewed  was 
^146,000,000.  The  deductions,  mainly  in 
respect  of  over-assessments  and  insurances, 
were  £  12, 000,000. 

Thus,  if  we  take  into  account  the  statutory 
deductions  only,  it  would  appear  that  the 
aggregates  of  net  private  incomes  in  excess  of 
;£i6o  which  are  comprised  respectively  under 
each  of  the  above  headings  were  as  follows : — 
(i)  rents  of  all  kinds,  172  million  pounds;  (2) 
farmers'  profits,  5  million;  (3)  interest  on 
government  stock,  45  million ;  (4)  profits  or 
similar  gains  from  all  professions  and  busi- 
nesses, 463  million;  (5)  salaries  of  employees, 
135  million;  the  sum  of  all  these  items  being 
820  million. 

The  Census  of  Production,  however,  shows 
as  has  been  said  already,  that  the  statutory 
deductions  are  deficient,  being  short  by  more 
than  30  per  cent,  of  the  actual  amount  required. 
The  deficiency,  which  amounts  to  about 


Chap.  III.]  COvST  OF  UPKEEP  »55 

£i 00,000,000, l  being  wholly  in  respect  of 
upkeep,  it  affects  only  the  first  of  the  above 
groups  of  incomes,  namely,  that  comprising  the 
rent  of  farms  and  of  all  buildings;  and  the 
fourth,  which  comprises  the  profits  of  all  busi- 
nesses involving  the  use  of  machinery,  ships, 
railways,  and  industrial  plant  generally.  So 
far  as  the  first  group  is  concerned,  the  Census 
of  Production  shows  that  the  actual  outgoings 
in  respect  of  agricultural  upkeep  are  about 
£  1 5, 000,000,  or  ,£8,000,000  in  excess  of  the 
statutory  allowances.  Thus  ^8,000,000  out  of 
the  ;£  1 00,000,000  is  accounted  for.  The 
remainder,  namely,  ,£92,000,000,  relates  to  the 
upkeep  of  manufacturing  and  carrying  equip- 
ment of  the  Kingdom,  and  represents  the 
excess  of  the  actual  cost  of  such  upkeep  over 
a  statutory  allowance  of  ^25,000,000,  the  true 
total  being  ^117, 000,000.  Let  our  figures, 
as  previously  given,  be  corrected  in  these  two 
particulars,  and  our  general  analysis  of  the  net 
total  subject  to  income-tax  will  be  as  follows: 

i.  As  against  a  total  in  respect  of  all  kinds  of  upkeep, 
which  is  allowed  by  the  Income  Tax  Commissioners,  and 
which  amounts  to  above  £67,000,000,  the  actual  upkeep 
costs,  as  shown  in  the  Census  of  Production  (see  Final 
Report,  p.  36),  are  as  follows :  Agricultural  upkeep, 
£15,000,000;  upkeep  of  buildings,  £35,000,000,  which  ia 
the  official  allowance;  upkeep  of  shipping,  £8,500,000; 
upkeep  of  railways,  and  public  utility  equipment, 
£38,000,000;  and  of  manufacturing  plant  generally, 
£71,000,000;  the  total  being  about  £167,000,000. 


156  KENT  [Book  III. 

(1)  Net  rent  of  farm-lands,  building-sites  and 
buildings,  ^166,000,000. 

(2)  Farmers'     profits,     as     before     given, 
,£5,000,000. 

(3)  Interest  on  government  stock,  as  before 
given,  ^45,000,000. 

(4)  Gains   from  professions  and  businesses 
other  than  agriculture,  ^370,000,000. 

(5)  Salaries  of  employees,  as  given  before, 
j£  1 34,000,000. 

The  total  of  which  items  is  ^720,000,000. 

Here  we  have  a  synopsis  of  net  private 
incomes  in  excess  of  ,£160  a  year,  as  analysed 
in  accordance  with  the  methods  of  the  Commis- 
sioners of  Inland  Revenue.  In  two  cases  the 
figures  have  been  revised,  but  the  general 
arrangement  is  the  same.  Certain  of  the 
figures,  namely,  those  relating  to  rent,  to  interest 
on  government  stock,  and  gains  from  profes- 
sions and  businesses,  may  be  readily  analysed 
farther. 

The  sum  total  of  rent  going  to  persons  whose 
incomes  exceed  ,£160  a  year  can  be  shown  to 
resolve  itself  into  the  four  following  portions : 
(i)  rent  of  farm-lands  (including  all  landlords' 
improvements),  ^33,000,000^  (2)  rent  of  build- 
ing-sites, commonly  called  ground-rent,  as  dis- 

i.  The  "gross  amount  reviewed"  in  1910  was  £52, 000,000. 
From  this  (according  to  Census  of  Production)  £15,000,000 
must  be  deducted  in  respect  of  agricultural  upkeep ;  and 
from  the  remaining  £37,000,000  about  £4,000,000  consists 
of  certain  over-assessments,  and  rent  going  to  owners 
whose  incomes  from  all  sources  do  not  exceed  £160. 


Cnap.  III.J        PROFESSION AI.  PROFITS  15? 

tinct  from  the  rent  of  buildings,  ^35,000,000; 
(3)  rent  of  private  dwellings,  as  distinct  from 
the   rent   of   sites,    ^62,000,000;     (4)   rent   of 
premises   used    for   manufacture   or   trade,   as 
distinct  from  the  rent  of  sites,  ^34,ooo,ooo.2 

Interest  on  government  stock  can  be  shown 
to  resolve  itself  into  ^15,000,000  from  home 
stock,  and  ^30,000,000  from  foreign. 

Profits  from  professions  and  businesses  may 
be  divided  by  taking  the  former,  in  accordance 
with  a  current  estimate,  as  ^60,000,000.  Thus, 
the  total,  as  we  have  seen,  being  about 
^370,000,000,  the  profits  from  business — that 
is  to  say  production  and  commercial  distribu- 
tion— will  be  about  ^310,000,000. 

The  attention  of  the  reader  is  called  to  these 
sub-classifications,  because  they  will  enable  us, 
with  a  clearness  not  otherwise  possible,  to 
realise  what  the  composition  of  the  whole 
amount  here  in  question  is.  We  will,  therefore, 
for  reasons  which  will  appear  presently,  re- 
arrange in  the  following  order  the  portions 

i. Of  the  "gross  amount  reviewed"  in  respect  of  build- 
ings and  sites  (which,  allowance  being  made  for  over- 
assessments,  is  a  little  over  ^200,000,000),  ground  rent 
accounts  for  about  one-fifth,  or  .£40,000,000.  Of  this  about 
one-seventh  goes  to  charities  and  persons  whose  incomes 
do  not  exceed  ^160. 

2.  Out  of  the  "gross  amount  reviewed"  in  respect  of 
buildings  alone,  ^42,000,000  was  in  respect  of  factories 
and  other  trade  premises,  and  ^34,000,000  in  respect  of 
upkeep.  Nearly  one-sixth  of  the  total  rent  of  private 
houses  goes  to  charities,  and  persons  with  incomes  not 
exceeding  £160. 


158  PROFESSIONAL  INCOMES       [Book  III. 

which  have  thus  been  differentiated,  and  begin 
by  placing  certain  of  them  in  a  group  by  them- 
selves. 

Professional  earnings  and  the  salaries  of 
employees,  the  former  estimated  at  ;£  60,000,000, 
the  latter  known  to  be  ^134,000,000;  total 
;£  1 94,000,000. 

Interest  on  home  government  stock, 
^15,000,000. 

Ground-rents  of  all  buildings,  ^34,000,000. 

Structure-rent,  as  distinct  from  ground-rent, 
of  private  houses,  ^63, 000,000. 

These  portions,  yielding  a  total  of 
^306,000,000,  have  been  thus  grouped  together, 
because  the  character  of  each  is  sufficiently 
intelligible  to  everybody,  and  the  amount  in 
each  case  can  be  in  the  main  determined  by 
reference  to  information  provided  by  the 
Commissioners  of  Inland  Revenue ;  whilst  the 
remainder,  amounting  to  ,£414,000,000,  has 
only  just  become  susceptible  of  anything  like 
complete  analysis.  It  consists  entirely  of 
profits  or  dividends  arising  from  productive 
enterprises  carried  on  or  owned  by  British 
subjects,  whether  in  this  country  or  abroad,  and 
from  the  commercial  enterprises,  including 
transport,  by  means  of  which  the  products 
become  accessible  to  the  final  buyers.  It 
includes,  under  these  headings,  the  rent  of 
agricultural  land,  and  farmers'  profits,  these 
together  being  treated  as  agricultural  profits  : 
and  also  the  rent  of  factory  buildings  and  other 
business  structures,  these  being  treated  as  a 


Chap.  III.]       CENSUS  OF  PRODUCTION  159 

part  of  industrial  and  commercial  capital. 
These  amounts,  which  have  been  already 
stated,  are  ascertainable  from  the  income-tax 
returns,  but  our  information  otherwise  with 
regard  to  business  profits  has  till  lately  been 
meagre  in  the  extreme.  The  Census  of  Pro- 
duction supplies  us  with  the  information  which 
before  was  wanting. 

In  order  to  utilise  this  for  our  present  purpose, 
let  us  briefly  review  it  as  a  whole. 

In  the  year  1907  the  total  net  value1  of  all  the 
goods  produced  for  final  use  or  enjoyment  in 
this  country  was,  by  the  time  they  reached  the 
final  buyers,  about  ;£  1,600,000,000.  Goods  of 
home  manufacture  accounted  for  about 
,£960,000,000,  goods  imported  as  the  property 
of  British  subjects  from  abroad  for  ^240,000,000; 
total  ,£1,200,000,000.  A  sum  equal  to  one- 
third  of  this,  that  is  to  say  about  ^400,000,000, 
was  added  to  the  value  of  the  goods  by  those 
processes  of  commercial  distribution  which 
enabled  the  final  buyers  to  acquire  them.  The 
whole  of  this  ,£1,600,000,000,  however,  did  not 
go,  as  personal  gain,  to  the  sellers.  A  sum 
equal  to  very  nearly  one-tenth  of  it  was  con- 
sumed in  the  maintenance  of  manufacturing 
and  commercial  capital : — ^95,000,000  (to  put 
the  matter  roughly)  in  the  maintenance  of  the 
productive  equipment  of  the  United  Kingdom, 

i.  It  must  always  be  noted  that  the  term  "net  value"  as 
used  in  the  Census  of  Production  means  the  total  selling 
yalue  minus  the  cost  of  raw-materials,  which  have  to  be 
defrayed  by  the  producers,  mainly  in  the  form  of  expenses, 
out  of  the  gross  value. 


i6o  GOODS  FROM  ABROAD          [Book  III. 

and  ^60,000,000  in  the  maintenance  of  the 
commercial  or  distributive  equipment.  Thus 
the  net  receipts  of  the  manufacturing  classes 
(agriculturists  included)  were  ,£865,000,000; 
and  the  net  receipts  of  the  commercial  classes 
were  ^340,000,000 ;  and  the  receipts  as  a  whole, 
therefore,  foreign  profits  included,  would  at  first 
sight  appear  to  be  made  up  as  follows  :  receipts 
from  home  manufactures  (including"  both  profits 
and  wages),  ^865,000,000;  receipts  from  com- 
mercial businesses  (wages  and  profits  included), 
^340,000,000;  goods  from  abroad  (profits 
only),  ^240,000,000. 

Such  however,  is  not  precisely  the  case. 
The  goods  from  abroad  as  soon  as  they 
reach  these  shores  must,  no  less  than  those 
of  home  manufacture,  become  the  subjects 
of  commercial  distribution;  the  costs  of  which, 
to  the  extent  of  about  ^60,000,000^  will 
ultimately  be  paid  out  of  these  goods  them- 
selves, as  a  man  who  distributed  twenty- 
four  pounds  of  tea  might  be  paid  by  being 

i.  Sir  R.  Giffen  estimated  more  than  fifteen  years  ago 
that  about  ^50,000,000  of  the  wages  of  the  working  classes 
of  this  country,  employed  in  distribution,  was  in  reality 
of  foreign  origin.  This  means  that  if  it  were  not  for  goods 
imported  from  abroad,  as  the  property  of  British  owners 
(and  not  in  exchange  for  exports),  the  British  workers 
would  not  receive  wages  for  handling  them.  It  is  possible 
that  the  amount  earned,  whether  in  the  form  of  profits  or 
wages,  by  the  handling  of  such  goods,  may  be  somewhat 
underestimated  in  the  text,  in  which  case  what  we  may 
call  pure  profits  from  abroad  would  be  less  than 
£180,000,000,  and  perhaps  not  be  more  than  ^160,000,000. 


Chap.  III.]      PROFITS  AND  DIVIDENDS  161 

allowed  to  keep  half  a  dozen  for  his  own 
consumption.  This  ^60,000,000  therefore, 
though  in  a  certain  sense  imported,  may  more 
properly  be  regarded  as  the  earnings  of  the 
commercial  classes  at  home;  and  pure  profits 
from  abroad,  as  the  phrase  would  be  commonly 
understood,  will  not  have  been  more  than 
;£  1 80,000,000.  The  total  profits  and  dividends, 
therefore,  of  the  United  Kingdom,  which  arise 
from  the  production  and  distribution  of  goods, 
amounting  in  all  to  about  ^414,000,000,  are  in 
reality  made  up  as  follows : — 

Profits  (subject  to  income-tax)  derived  from 
home  manufactures  and  agriculture,  about 
;£  1 64,000,000. 

Profits  (subject  to  income-tax)  from  distribu- 
tive businesses,  including  those  of  businesses 
dealing  with  goods-income  of  foreign  origin, 
about  ,£70,000,000. 

Profits  (i.e.,  goods  owned  by  British  subjects) 
from  abroad,  about  ^180,000,000. 

We  may  here  revert  for  a  moment  to  a  fact 
which  has  been  already  mentioned,  namely  that 
about  one-fifth  of  the  total  income  of  the  nation, 
or  ^400,000,000,  according  to  the  census  of 
production,  represents  neither  goods  nor  the 
distribution  of  goods,  but  services.  This  fact 
requires  some  explanation.  The  word  "  ser- 
vices "  as  thus  employed  includes  not  only 
services  of  a  non-material  character,  such  as 
those  rendered  by  a  domestic  servant,  or  by 
a  teacher,  but  also  the  consignment  by  one 
party  to  another,  not  of  the  possession  of  goods. 


i6a  PROFITS   AND   WAGES  [Book  III. 

but  the  temporary  use  of  certain  of  them,  such 
as  a  dwelling-house,  a  building-site,  a  railway 
carriage,  a  berth  on  a  steamer,  or  the  appliances 
employed  by  the  post-office  for  the  transmission 
of  letters.  Such  being  the  case,  the  income 
representing  services  will,  in  so  far  as  it  con- 
sists of  profits  subject  to  income-tax,  consist  of 
rent  of  private  houses  (as  already  given) 
^62,000,000;  rent  of  building-sites  (as  already 
given),  ^34,000,000;  professional  earnings  (as 
already  estimated),  ^60,000,000;  to  which  must 
be  added  ^24,000,000  out  of  the  total  of 
employees'  salaries,  this  being  the  amount 
earned  by  state  officials,  and  other  kindred 
functionaries;  and  also  (though  here  is  a  sum 
which  might  no  doubt  be  classified  otherwise) 
interest  on  money  lent  to  the  British  Govern- 
ment, the  amount,  as  already  stated,  being  about 
,£15,000,000.  These  sums  together  make  up 
nearly  ^200,000,000.  The  remainder,  not  sub- 
ject to  income-tax,  will  consist  of  the  wages  of 
domestic  servants  and  certain  other  workers, 
and  the  earnings  (whether  as  salaries  or  other- 
wise) of  officials,  teachers,  agents,  and  profes- 
sional or  quasi-professional  persons  belonging 
to  the  lower  middle  class. 

To  some  readers,  no  doubt,  these  details  may 
seem  wearisome.  They  are,  however,  worthy 
of  close  attention,  and  all  of  them  bear  directly 
on  the  social  controversies  of  to-day.  The 
various  groups  of  taxable  profits  dealt  with  may, 
however,  according  to  the  point  of  view  front 
which  we  happen  to  be  regarding  them,  be 


Chap.  III.]   INACCURATE  CLASSIFICATION  163 

classified  in  many  ways  without  disturbing 
individually  any  details  of  the  foregoing 
analyses.1  The  whole  oi  them  shall  now  be 
once  more  taken  together,  and  presented  in  the 
way  most  consonant  with  customary  habits  of 
thought. 

It  is  customary  with  most  persons  when 
considering  the  incomes  of  the  rich  and  the 
relatively  rich,  and  especially  when  considering 
them  for  purposes  of  social  agitation,  to  divide 
the  recipients  into  classes  which  are  recognised 
as  at  once  familiar  and  distinct,  not  by  a  strict 
logic,  but  by  common  experience  and  by  the 
imagination.  The  imagination,  indeed,  per- 
sonifies them  as  so  many  typical  figures,  of 
which  as  many  as  nine  may  without  difficulty, 
be  distinguished:  (i)  the  country  landlord;  (2) 
the  urban  ground-landlord;  (3)  the  owner  of 
house  property ;  (4)  the  capitalist  who  is  a  direct 
employer  of  labour  in  this  country,  such  as  the 
manufacturer,  the  large  farmer,  and  the  mer- 
chant; (5)  the  capitalist  who,  not  being  a  direct 
employer  himself,  lives  on  the  interest  of  capital 
which  the  direct  employer  uses;  (6)  the  profes- 
sional man;  (7)  the  government  functionary; 
(8)  the  business  employee,  such  as  the  manager, 

i.  Thus  the  salaries  of  business  employees  exceeding 
ftido  a  year  might  be  grouped  with  the  profits  of  both 
manufacture  and  distribution ;  in  which  case  the  business 
profits  of  the  nation  would  not  be  ^234,000,000,  but 
^334,000,000  :  and  if  foreign  profits  be  added,  the  profits 
having  material  goods  as  their  basis,  would  be  at  least 
^500,000,000. 


164  CLASSIFICATION  OF  INCOMES    [Book  III. 

the  cashier,  or  the  clerk;  (9)  the  man  whose 
fortune  is  derived  from  South  Africa,  from 
Mexico,  from  the  Argentine  Republic,  or  from 
any  country  other  than  the  United  Kingdom. 

For  our  present  purposes,  however,  these 
types  may  be  reduced  to  five,  namely  (i)  the 
owner  of  land  of  whatever  kind,  whether  agri- 
cultural or  urban;  (2)  the  owner  of  house 
property;  (3)  the  professional  man  or  the 
functionary,  living  on  fees,  stipend  or  salary; 
(4)  the  capitalist  who,  whether  as  an  active 
business  man  or  a  shareholder,  employs  labour 
in  the  United  Kingdom  with  a  view  to  business 
profit;  (5)  the  man  who,  whether  as  a  principal 
or  shareholder,  derives  his  income  from  the 
employment  of  labour  in  other  countries. 

The  aggregate  amount,  and  also  the  amount 
per  £  of  the  taxable  income  of  the  country, 
going  to  persons  of  each  of  these  five  types 
respectively,  will  be  as  follows  : — 

Amount  per  /,' 
of  total  subject 
to  income  tax 
-Amount  of  Income  8.      d. 

Owners   of    land,   rural 

and  urban     ...          ...     68,000,000  ...   I   10 

Owners   of   house   pro- 
perty ...          ...     62,000,000  ...    i     9 

Professional    men    and 

employees    ...          ...    194,000,000  ...   5     5 

Capitalists      employing 

labour  in  this  country  216,000,000  ...   6     o 

Capitalists      employing 

labour  abroad          ...    180,000,000  ...   5     o 
^720,000,000       20     o 


Chap.  III.]    CLASSIFICATION  OF  INCOMES  165 

It  must,  of  course,  be  remembered  that  these 
types  are  in  actual  life  not  mutually  exclusive. 
The  same  individual  may  figure  in  various 
characters.  An  owner  of  land  may  be  also  an 
owner  of  houses,  or  of  shares  in  a  manufactur- 
ing business.  A  doctor,  or  a  clergyman,  or  a 
manufacturer  may  be  also  an  owner  of  land. 
Thus  the  coincidence  of  the  several  amounts 
in  question  with  the  actual  incomes  of  persons 
of  the  types  severally  corresponding  to  them 
will  be  more  or  less  imperfect;  but,  as  the 
sources  of  the  incomes  received  by  various 
persons  are  no  less  the  subject  of  current  con- 
troversy than  the  amounts,  and  as  many  of  the 
proposals  urged  by  the  most  vehement  reformers 
turn  on  them,  the  above  general  analysis  of  the 
sources  of  the  taxable  income — the  net  amount 
of  this  being  ^"720,000,000 — has,  as  will  be 
seen  presently,  a  most  important  bearing  on 
the  concrete  facts  of  the  situation. 

Having  thus  dealt  with  the  sources  of  that 
income  and  its  amount,  we  will  now  consider 
the  number  of  those  amongst  whom  it  is  distri- 
buted, and  also  the  numbers  of  those  whose 
individual  incomes  lie  within  different  limits. 


CHAPTER    IV. 

THE  number  of  persons  whose  incomes  exceeded 
.£160  a  year  would,  according  to  estimates 
submitted  to  the  Select  Committee  on  Income- 
tax,  appear  to  have  been  in  the  year  1904  or 
1905  something  in  excess  of  1,100,000,  which 
we  may  take  roughly  as  meaning  1,150,000. 
In  a  previous  chapter  the  number  at  the  present 
time  has  here  been  given  as  1,400,000.  With 
regard  to  this  larger  figure  it  may,  therefore,  be 
observed  at  starting,  that  even  had  the  lower 
one  been  correct  at  the  time  when  it  was  put 
forward,  we  know  as  a  fact  from  the  income-tax 
returns  that  one  group  of  taxpayers  alone — 
that  is  to  say  the  salaried  employees — has 
increased  since  then  by  about  140,000;  so 
that,  according  to  the  most  moderate  com- 
putations, the  total  to-day  would  be  nearly 
1,300,000.  The  reasons  for  concluding  that 
the  true  number  is  not  less  than  1,400,000,  shall 
now  be  explained  in  detail. 

If  income-tax  were  assessed  to-day  as  it  was 
in  the  year  1801,  no  disagreements  as  to  the 
present  question  would  be  possible ;  for  in  that 
vear  every  assessed  person  was  called  on  to 
make  a  declaration  of  what  his  total  income 
from  all  sources  came  to.  The  number  of  such 
persons  could  therefore  be  directly  ascertained 
and  stated,  and  they  and  their  incomes  were,  in 

166 


Chap.  IV.]  SOURCES   OF   INCOME  it>7 

the  Report  of  the  Commissioners,  divided  into 
more  than  thirty  minutely  graduated  groups. 

But  the  total  amount  subject  to  income-tax, 
as  we  have  seen  in  the  last  chapter,  is  primarily 
classified  to-day  with  a  view  to  its  sources,  rather 
than  to  the  individual  recipients.  The  sources — 
to  re-state  with  certain  added  particulars  what 
has  been  said  already — are  ownership  of  lands 
and  houses,  professional  work,  businesses  carried 
on  by  companies,  by  individual  persons,  and  by 
private  firms,  and  finally  salaried  employments. 
With  one  notable  exception  it  is  in  respect  of 
incomes  derived  from  these  last  three  sources 
only  (the  net  total  of  which  is  less  than 
;£3<x>,ooo,ooo),  that  any  enumeration  is  given 
of  individual  assessments  whatsoever.  The  ex- 
ception relates  to  incomes  in  excess  of  ^5,000. 
To  these  we  shall  return  hereafter;  but  their 
number  is  small,  and  for  the  moment  it  is  not 
important.  For  the  moment  it  is  enough  to 
observe  that,  of  the  total  amount  to  be  accounted 
for  the  individual  assessments  enumerated 
relate  to  far  less  than  a  half.  Thus  whilst  we 
are,  for  example,  told  with  the  utmost  exactitude 
the  number  and  the  individual  earnings  of  the 
whole  army  of  salaried  employees,  no  similar 
information  is  provided  as  to  the  owners  of  real 
property,  or  the  principal  partners  or  the  share- 
holders in  any  business  of  any  kind  which  is 
carried  on  as  a  company.  Hence  with  regard 
to  the  larger  portion  of  the  taxable  income  of 
the  country  it  might  seem  that  any  computation 
of  the  number  of  separate  individuals  receiving 


168        ASSESSMENTS  AND  INDIVIDUALS    [Book  III 

it  would  be  little  more  than  guess-work.  Such, 
however,  is  not  the  case.  Let  us  begin  with 
the  enumerated  assessments  and  see  how  far 
they  will  carry  us. 

The  total  number  of  these  in  the  year  1910 
was  1,310,000.  But  even  this  figure  cannot, 
without  farther  consideration,  be  accepted  at 
its  face-value;  for  one  individual  may  be 
assessed  under  more  than  one  heading — as  a 
government  clerk,  for  example,  in  which  case  he 
is  assessed  as  an  employee;  and  also  as  an 
author,  in  which  case  he  is  assessed  as  a 
"  person."  It  is  therefore  obvious  that  the 
number  of  individual  assessments  is  greater 
than  the  number  of  separate  individuals  repre- 
sented by  them.  On  the  other  hand  we  have 
more  than  ,£400,000,000  which  is  not  accounted 
for  in  the  form  of  individual  assessments  at  all; 
and  if  we  consider  these  two  facts  together,  it 
may  seem  at  first  sight  that  we  are  as  far  from 
any  definite  conclusion  as  we  should  have  been 
had  the  enumeration  been  altogether  suppressed. 

But  such  a  conclusion  would  be,  even  on  the 
face  of  it,  incorrect.  In  the  first  place,  of  these 
enumerated  assessments,  there  are  very  nearly 
800,000 — namely,  those  relating  to  employees 
and  partners  in  private  firms — which  really  do 
what  they  seem  to  do,  and  represent  the  same 
number  of  separate  individuals;  and  what  we 
know  from  the  census  of  the  population  with 
regard  to  the  occupations  of  the  people  will 
enable  us  to  add  roughly  some  430,000  separate 
individuals  more,  consisting  of  professional 


Chap.  IV.J  A  COINCIDENCE  169 

men,  shop-keepers,  factory-owners  and  large 
farmers.  A  farther  addition  may  be  made  of 
some  100,000  men  and  a  considerable  number 
of  women,  describable,  in  the  language  of  the 
census  returns,  as  "  living  on  their  means  " ; 
and  we  thus  approach  a  total  of  separate 
incomes  which  is  not  very  different  from  that 
of  the  assessments  separately  enumerated. 

It  is  true  that  such  a  coincidence,  in  so  far 
as  it  really  exists,  is  literally  a  coincidence  in 
the  ordinary  sense  of  the  word;  for  it  is  not  a 
result  which  is  referable  to  any  known  and 
calculable  causes.  That  it  is,  however,  a 
reality,  and  is  more  or  less  constant  in  character, 
is  suggested  by  the  curious  fact  that  it,  or 
something  very  like  it,  was  observed  and 
brought  to  the  notice  of  Professor  Leone  Levi 
by  a  prominent  official  of  the  income-tax  depart- 
ment about  thirty  years  ago.  It  was  stated  by 
this  official  that  the  separate  assessments  of 
"persons"  disclosed,  in  respect  of  their  amounts, 
a  close  similarity  to  that  which  is  known  by  the 
commissioners  to  prevail  throughout  the  body 
of  the  taxpayers  generally ;  and  farther  that  the 
total  number  of  those  subject  to  income-tax  was 
from  year  to  year  about  three  times  the  number 
of  the  assessments  enumerated  in  this  special 
group.  In  the  year  1910  the  number  of  the 
assessments  of  "persons"  was  436,000.  Hence 
the  total  number  of  those  subject  to  income-tax 
to-day  would  by  parity  of  reasoning  be  about 
i  ,300,000 ;  and  though  the  great  and  dispropor- 
tionate increase  which,  during  the  last  thirty 


170  HOUSES  AND  OCCUPIERS       [Book  III. 

years,  has  taken  place  in  the  class  of  salaried 
employees  would  lead  one  to  expect  that  the 
figure  thus  reached  would  be  too  low,  we  should 
not  be  reasoning  without  some  grounds  if  we 
adopted  it. 

Nevertheless  it  may  be  admitted  that  any 
estimates  thus  formed  would  be  not  very  precise 
and  not  very  convincing  if  we  were  not  able  at 
once  to  correct  and  corroborate  them  by  means 
of  evidence  of  a  different  kind  altogether,  to 
which  reference  has  been  made  already,  namely 
that  supplied  by  houses. 

It  is  commonly  recognised  that  the  annual 
value  of  a  house  bears  a  fairly  general  ratio 
to  the  income  of  its  responsible  occupier. 
Many  people  are  content  with  the  rough 
assumption  (correct  within  certain  limits)  that 
the  ratio  of  house-rent  to  income  on  an  average 
is  as  i  to  i  o.  A  farther  assumption  is  general 
of  a  more  precise  kind,  that  persons  whose 
incomes  are  not  more  than  £160  a  year  are 
unlikely  to  spend  more  than  £20  a  year  in 
house-rent,  which,  rates  being  added,  would 
mean  an  outlay  of  ^26,  or,  in  some  cases,  of 
£30.  This  assumption,  which  is  the  outcome 
of  common  experience,  has  received  the  sanc- 
tion of  legislation;  for  just  as  the  incomes  not 
exceeding  ^160  are  exempt  from  income-tax, 
so  houses  whose  annual  value  is  not  in  excess 
of  £20  are  correspondingly  exempt  from  house- 
duty.  The  number  of  houses,  therefore,  whose 
value  exceeds  the  sum  in  question,  and  the 
number  of  incomes  exceeding  £160  would, 


Chap.  IV.]     ANNUAL  VALUE  OF  HOUSES  171 

according  to  this  assumption,  be  identical;  and 
the  number  of  such  houses  having  in  the  year 
1910  been  very  considerably  more  than 
i, 600,000, L  such  would  be  the  number  of  the 
persons  subject  to  income-tax  also.  But  this 
argument,  it  is  obvious,  must  not  be  pushed  too 
far.  A  large  number  of  houses  worth  more 
than  £20  a  year  are  notoriously  inhabited  by 
two  or  more  separate  occupiers  whose  means 
would  not  permit  of  their  renting  such  premises 
singly;  and  this  fact  is  insisted  on  with  much 
emphasis  by  statisticians  who,  with  a  view  to 
accentuating  their  picture  of  the  manner  in 
which  wealth  is  concentrated,  are  anxious  to 
maintain  that  the  rich,  and  the  comparatively 
rich  do  not  consist  even  by  this  time  of  very 
much  more  than  1,100,000  persons.  The  argu- 
ment is  correct  in  principle.  The  only  question 
is,  how  far  it  will  carry  us ;  and  this  can  only  be 
determined  by  examining  facts  in  detail. 

We  may  begin,  then,  by  observing  that,  on 
the  admission  of  all  parties,  houses  whose 
annual  value  is  upwards  of  ^"40  may  be  taken 

i.  The  number  of  ordinary  private  houses  worth  more 
than  j£2o  a  year  was,  in  1910,  1,534,000  :  but  to  this  num- 
ber must  be  added  about  100,000  separate  flats,  residential 
suites  or  tenements,  of  an  average  rental  value  of  ^40. 
These  are  separately  classified  in  the  returns.  The  large 
number  of  them  are  situated  over  shops,  the  residential 
rent  of  which,  according  to  expert  enquiries,  averages  one- 
third  of  the  total  rent.  Thus  only  those  residences  are 
here  included  which  form  part  of  premises  whose  total 
ralue  is  more  than  j£6o.  See  Statistical  Monograph  23. 


172  PRIVATE  DWELLINGS  |Book  III. 

with  substantial  accuracy  as  the  homes  of  single 
families,  and  as  each  representing  an  income 
which  will  not  be  less  than  £400  a  year.  The 
question,  therefore,  of  the  number  of  houses 
the  rent  of  which  is  shared  by  two  groups  of 
occupants  or  by  more,  is  a  question  which 
relates  mainly  to  houses  whose  annual  value  is 
from  £20  a  year  to  ^40. 

In  view  of  the  information  available,  we  can 
deal  with  the  question  most  precisely  if  we 
confine  our  attention  to  England.  The  number 
of  private  dwellings  in  England  worth  more 
than  £20  a  year  is  1,540,000.  If  the  number  of 
persons  subject  to  income-tax  in  the  United 
Kingdom  is  not  more  than  1,150,000,  the 
number  in  England  alone  will  be  approximately 
1,000,000;  and,  having  assigned  to  these  the 
same  number  of  the  most  valuable  houses  in 
the  country,  we  shall  be  left  with  540,000 
houses  worth  from  £20  a  year  to  ^40,  each 
of  which,  according  to  our  present  hypothesis, 
would  be  necessarily  divided  into  at  least  two 
tenements,  and  let  to  occupiers  who  were  not 
subject  to  income-tax,  or  who  were  not  (in 
other  words)  rich  enough  to  rent  the  whole  of 
it.  Is  this  possible? 

In  order  to  see  whether  it  is,  let  us  consider 
what  is  definitely  known  as  to  the  housing  of 
the  population  as  a  whole.  If  we  deduct  the 
1,000,000  houses  assignable  without  dispute  to 
persons  subject  to  income-tax,  the  remaining 
private  dwellings  in  England  number  6,320,000, 
and  the  number  of  separate  occupiers,  or 


Chap.  IV  J  LODGERS  173 

occupying  groups,  is  6,988,000.  This  means 
that  there  are  in  England  668,000  separate 
lodgers  or  lodging  families;  and  if  no  house- 
holder took  in  more  than  one  of  these,  there 
would  be  668,000  separate  dwellings  each  of 
which  was  sub-divided,  and  shared  by  two  occu- 
piers between  them.  It  is,  however,  known 
from  the  reports  relating  to  overcrowded 
tenements,  that  the  lodging  population  of 
England  comprises  about  560,000  occupiers, 
who  cannot  share  between  them  more  than 
130,000  separate  houses  or  dwellings.  As  to 
the  108,000  lodging  occupiers  who  remain, 
and  who  are  not  in  the  overcrowded  class,  even 
if  in  no  case  there  were  more  than  one  lodger 
or  lodging  family  to  a  house,  the  number  of 
houses  receiving  them  could  not  be  more  than 
108,000.  It  would  thus  appear  that  the  number 
of  houses  which  are  inhabited  by  more  families 
or  separate  occupiers  than  one,  cannot  exceed 
some  240,000.  In  any  case  they  cannot  be  as 
many  as  300,000;  whereas,  according  to  what 
we  have  seen  already,  they  could  not  be  fewer 
than  550,000,  if  only  a  million  houses  worth 
more  than  £20  a  year  were  inhabited  by  persons 
who,  being  rich  enough  to  occupy  them  singly, 
would  (by  common  admission)  presumably 
be  subject  to  income-tax.  In  short,  if  we 
consider  what  we  know  as  to  the  housing  of  the 
population  as  a  whole,  without  any  reference 
to  evidence  of  any  other  kind,  it  appears  that 
the  number  of  persons  subject  to  income-tax  in 
England,  and  so  distinguished  by  their  single 


174  OCCUPANCY  [Book  III. 

and  undivided  occupancy  of  houses  or  dwel- 
lings worth  more  than  £20  a  year,  cannot  be 
less  than  1,250,000;  and  that  the  total  number 
of  such  persons  in  the  United  Kingdom  cannot, 
according  to  similar  evidence,  be  less  than 
1,400,000. 

We  will  not,  however,  dwell  longer  on  such 
evidence  considered  by  itself.  A  certain 
crucial  portion  of  it  shall  now  be  re-examined 
more  minutely,  in  connection  with  evidence  of 
an  independent  kind,  the  significance  of  which 
appears  thus  far  to  have  escaped  the  notice  of 
statisticians.  The  only  point  at  issue  with 
regard  to  the  occupancy  of  houses  as  evidence 
that  the  income  of  the  occupiers  exceeds  £160 
a  year,  relates  to  houses  worth  between  £20  a 
year  and  ^40,  and  costing,  if  rates  be  included, 
from  £26  a  year  to  /.So.  Attention  has  been 
called  to  the  fact  that  a  remarkable  correspon- 
dence discloses  itself,  however  indirect  may  be 
its  origin,  between  the  number  of  enumerated 
assessments  and  the  total  number  of  persons 
presumably  subject  to  income-tax;  and  when 
we  come  to  collate  these  assessments  with  the 
number  of  houses  which  appear  to  represent 
such  persons,  the  correspondence  becomes  more 
remarkable  still.  The  number  of  houses  worth 
more  than  ^40  a  year,  and  presumably  occupied 
by  persons  whose  incomes  exceed  ^400,  is 
indeed  much  greater  than  the  number  of  similar 
separately  enumerated  assessments ;  but  be- 
tween the  number  of  houses  worth  from  £20  a 
year  to  £AO.  and  the  number  of  assessments 


Chap.  IV.]  ASSESSMENTS  175 

between  ^  160  a  year  and  ^400,  there  is  a 
parallelism  if  not  an  identity  of  the  closest 
and  most  striking  kind.  Thus  in  the  year 
1910  the  assessments  between  these  limits  in 
Great  Britain  numbered  970.000.  The  number 
of  houses  worth  from  £20  a  year  to  ^40 
was  1,100,000 — a  difference  of  13  per  cent. 
This  fact,  if  it  stood  alone,  might  have  no 
special  significance;  but  if  we  look  back  over 
a  period  of  nine  years  we  shall  find  that  it  is 
continuous.  In  the  year  1901  the  number  of 
enumerated  assessments  between  ;£i6o  and 
£400  was  767,000;  the  number  of  houses  worth 
from  £20  a  year  to  ^40  was  865,000 — a  differ- 
ence of  12  per  cent.  The  year  1902  was  a  year 
of  notorious  over-building;  and  from  1903  to 
1906  the  number  of  houses  exceeded  that  of 
assessments  by  as  much  as  1 5  per  cent ;  but  this 
abnormal  excess  having  exhausted  itself,  the 
difference  between  houses  and  assessments 
sank  back  to  its  former  proportions;  and  from 
1906  to  1910  it  was  once  more  about  12  per 
cent.1 

i.  If  we  express  the  number  of  assessments,  and  the 
number  of  houses  in  the  year  1901  by  the  index  number 
loo,  the  rate  of  increase  for  each  during  the  years  specified 
will  be  as  follows  : 

Number  of    Number  of  Number  of  Number  of 

assessments        houses  Meessments         houses 

between      worth  from  between  worth  from 

Y«ar        £160  &  £400    £20  to  £40  Year       £J60&£400  £20  to  £40 

1901  ...  100  ...  loo  1905  ...  no  ...  116 

1902  ...   103   ...   103   1908  ...   I2O   ...   124 

1903  ...  106  ...  no  1909  ...  122  ...  125 

1904  ...  109  ..  113  1910  ...  126  ...  126 


176  HOUSES  AMD  OCCUPIERS       [Book    III. 

A  correspondence  so  sustained  and  close 
cannot  be  the  result  of  chance.  The  number  of 
the  houses  exceeds  that  of  the  assessments 
throughout;  but  (one  year  being  taken  with 
another)  it  exceeds  it  in  a  regular  ratio,  the 
actual  average  excess  being  something  like 
120,000,  exclusive  of  flats,  and  the  residential 
portions  of  various  premises  otherwise  used  for 
business,  the  number  of  which  is  about  100,000. 
It  appears,  then,  all  things  being  considered, 
that  the  number  of  incomes  between  ,£160  a 
year  and  ^400  will  account  for  and  correspond 
to  970,000  houses  worth  from  £20  a  year  to 
£40.  To  these,  in  respect  of  Ireland,  must  be 
added  about  30,000  more,  so  that  the  total 
number  of  incomes  between  £160  a  year  and 
^400  will  be  about  1,000,000. 

We  are  thus  left  with  430,000  houses  worth 
more  than  ^40  a  year,  which  will  all  be  occupied, 
on  the  admission  of  all  parties  alike,  by  persons 
whose  incomes  are  in  excess  of  ^400.  Now  as 
to  these  houses  there  is  one  thing  which  we  know 
directly,  that  amongst  their  occupants  in  the 
year  1910  were  about  11,000  persons  whose 
incomes  were  in  excess  of  ,£5,000,  and  not  only 
probability  but  specific  evidence  assures  us  that 
each  of  such  persons  will  be  the  possessors  of 
more  houses  than  one.  We  may  assume  that  they 
will  have  occupied  between  them  something  like 
30,000.  There  will  thus  remain  about  400,000 
houses  worth  more  than  ^40  a  year,  and  about 
390,000  persons  as  their  occupants,  whose  in- 
comes will  range  from  ^400  a  year  to  ^"5,000. 


Chap.  IV.]  RENTAL   VALUE  177 

Thus  the  houses  will  outnumber  the  occupants 
by  something  like  10,000,  and  these  10,000  extra 
houses  we  take  to  be  secondary  residences  of 
persons  whose  incomes,  though  short  of  ,£5,000, 
are  at  all  events  not  less  than  ,£1,000.  In  what 
proportions,  then,  is  the  aggregate  income  of  the 
entire  body  of  390,000  persons  divided  ?  There 
are  various  data  by  means  of  which  an  answer 
to  this  question  may  be  reached. 

One  of  these  consists  of  the  rental  value  of 
the  houses  taken  in  groups,  and  the  presumed 
general  ratio  borne  by  rent  to  income.  Another 
consists  of  the  known  total  of  income  with  which 
we  can  compare  a  known  total  of  rent.  The 
aggregate  of  incomes  exceeding  ,£5,000  is 
definitely  known  to  be  about  £  13 5, 000,000; 
and  if  the  recipients  of  this  sum  occupy  the 
30,000  houses  which  stand  first  in  the  scale  of 
values,  their  house-rent  will  in  the  aggregate 
amount  to  about  ;£  10,000,000.  Of  the  whole 
of  the  remaining  houses  worth  more  than 
,£20  a  year  the  aggregate  rental  value  is 
,£5 6,000,000  j1  and  the  aggregate  income  of  all 
persons  subject  to  income-tax,  other  than  those 
whose  incomes  are  more  than  ,£5,000,  is  about 
^"585, 000,000.  With  regard,  therefore,  to  these 
persons  as  a  whole,  the  ratio  of  rent  to  income 
as  approximately  I  to  10  is  established  as  an 
actual  fact. 

i .  The  actual  total  rent  of  all  private  houses  worth  more 
than  £20  a  year  is  ^68,000,000  :  but  ^2,000,000  is  here 
deducted  in  respect  of  houses  assumed  to  be  occupied  by 
persons  not  subject  to  income-tax. 


178  ABATEMENTS  [Book  III. 

In  addition  to  these  data  are  the  following, 
of  a  quite  independent  kind,  which  relate 
specially  to  incomes  between  ^160  a  year  and 
^400.  The  enumerated  assessments  of  in- 
dividuals, as  given  in  the  official  returns,  are 
so  given  as  to  be  susceptible  of  sixteen  different 
analyses;1  and  the  result  of  these  is  to  show 
that  of  incomes  lying  between  / 160  a  year  and 
^400  the  general  average  is  ^260.  Thus,  if 
there  are  1,000,000  persons  whose  incomes  are 
of  this  magnitude,  the  total  income  of  the  group 
will  be  ^260,000,000.  And  there  are  two 
other  sets  of  data  by  which  such  a  conclusion 
is  corroborated.  Incomes  of  this  class  are 
subject  to  certain  "  abatements."  That  is  to 
say,  a  part  of  them  is  relieved  from  income-tax; 
and  it  appears  from  an  examination  of  the 
assessments  of  salaried  employees — a  case  with 
regard  to  which  a  direct  comparison  is  possible — 
that  the  amount  "  abated  "  is  a  little  less  than 
a  half  of  the  total  income  dealt  with.  If  this 
fact  be  taken  in  connection  with  the  total 
amount  abated  under  all  schedules,  it  will 
appear  that  the  estimate  of  ^260,000,000  as 
the  aggregate  income  of  the  1,000,000  persons 
here  in  question,  is  too  small  rather  than  too 
large.  Let  us  take  it,  however,  as  it  stands. 
Adding  this  to  the  total  of  incomes  in  excess  of 

i.  These  are  given  under  the  headings  of  person,  private 
firms,  employers  assessed  under  Schedule  D,  and  employers 
assessed  under  Schedule  E.  Each  of  these  groups  is  dealt 
with  in  four  Tables,  relating  to  the  United  Kingdom, 
England,  Scotland,  and  Ireland. 


Chap.  IV.]  AGGREGATE   INCOME  179 

j£5,ooo,  we  have  a  sum  of  ,£395,000,000  which, 
being  deducted  from  ^720,000,000,  leaves  us 
with  ^325,000,000  as  the  aggregate  income  of 
390,000  persons,  whose  incomes  range  pre- 
sumably from  ,£400  to  ,£5,000,  and  who  occupy 
between  them  400,000  houses  worth  from  ,£40 
a  year  to  £200.  Of  these  houses,  336,000  are 
worth  from  ^40  a  year  to  ;£ioo;  and  64,000  are 
worth  from  ;£ioo  a  year  to  £200.  It  appears, 
therefore,  reasonable,  in  view  of  what  we  have 
just  seen,  to  assume  that  326,000  of  the  former 
will  be  occupied  by  the  same  number  of  persons, 
having  incomes  exceeding  ,£400  but  not  exceed- 
ing ,£1,000;  the  extra  10,000  of  them  being 
occupied  as  secondary  residences  by  persons 
whose  means  are  larger;  and  that  these  last, 
having  incomes  between  ;£i,ooo  a  year  and 
,£5,000,  will  occupy,  as  their  principal  resi- 
dences, the  64,000  nouses  worth  from  ;£ioo  a 
year  to  ,£200. 

Now  just  as  there  is  evidence  to  show  that 
of  incomes  between  ,£160  and  ,£400  the  average 
is  ,£260,  so  also  is  there  similar  evidence  to 
show  that  of  incomes  between  ,£400  a  year  and 
;£i,ooo  the  average  is  ,£630.  If  then,  the 
number  of  incomes  in  this  group  has  been 
correctly  given,  the  aggregate  income  will  be 
^205, 000,000.  The  aggregate  of  incomes 
between  ,£1,000  a  year  and  ,£5,000  will  be 
£ 1 20,000.000. l  But  before  these  suppositions 

i.  The  enumerated  assessments  exceeding-  .£1,000  a  year 
are  too  few  to  yield  a  trustworthy  average,  the  reason 
being  that  a  far  larger  proportion  of  them  are  derived  from 


i8o  HOUSE-RENT  INCOME  [Book  III 

are  accepted  it  is  necessary  to  test  them  by 
considering  how  far  they  harmonise  in  detail 
with  one  of  the  principal  data  on  which  they 
are  all  founded,  namely,  the  common  working 
assumption  that  house-rent  bears  to  income  an 
average  ratio  of  approximately  i  to  10.  That 
this  is  not  an  assumption  merely,  but  a  verifiable 
fact  in  such  cases  as  are  here  in  question,  we 
have  already  seen  by  taking  facts  in  the  mass, 
and  comparing  the  total  of  incomes  in  excess 
of  ;£i6o  with  the  total  rent  of  the  houses  which 
the  recipients  of  such  incomes  occupy.  The 
ratio  of  rent  as  a  whole  to  income  as  a  whole 
was,  we  have  seen,  as  i  to  about  10^;  whilst,  if 
incomes  exceeding  ,£5,000  with  the  houses 
corresponding  to  them  are  deducted,  the  ratio 
for  the  remainder  is  almost  exactly  i  to  10. 
The  remainder  of  houses  and  incomes,  however, 
being  divided  into  three  groups,  it  will  be 
obvious  that  this  precise  ratio  will  not  prevail 
for  each  of  them ;  for  a  number  of  incomes  com- 
prised in  the  lowest  group  will  be  certainly  not 
far  from  the  minimum  of  £160,  and  cannot 
therefore  by  any  possibility  be  ten  times  as  great 
as  the  minimum  rent  which  is  £21.  The  ratio, 
therefore,  in  this  group  will  be  less  than  the 
general  average;  and  in  each  of  two  others  it 
is  bound  to  be  somewhat  greater.  Let  us,  then, 

real  estate,  and  other  sources  not  analysed  in  the  returns. 
Those,  however,  given  under  the  beading  of  "  private 
firms"  yield,  in  the  case  of  incomes  between  ^1,000  and 
^5,000  a  year  an  average  which  approaches  ^2,000. 


Chap.  IV.]  RENT  AND  INCOME  181 

in  respect  of  each  group  of  houses  take  the 
average  rent  per  house  as  ascertainable  from 
the  official  returns;  let  us  also,  in  respect  of  each 
corresponding  group  of  incomes,  take  the 
average  income  per  person,  as  deducible,  in 
accordance  with  the  figures  already  given,  from 
the  aggregate  income  of  the  group  and  the 
number  of  persons  comprised  in  it;  and  let  us 
consider  the  results. 

These  can  best  be  shown  by  means  of  a  short 
table : — 

Range  of         Range  of       Range  of        Range  of 

income  income  income  income 

£160-£400      £400-£1000    £1000-£5000    over  £5000 

Number  of  persons  as 

estimated  above    ...  1,000,000  326,000  64,000  11,003 

Average  income         ...  £260  £630  £1,980  £12,000 
Range    of     rent     per 

house            £20-£40  £40-£100  £100-£200  over  £200 

Average  rent  per  house  £28  £60  £150  £900 J 

Ratio  of  rent  to  income  1  to  9i  1  to  10$  1  to  12i  1  to  13$ 

It  will  be  seen  that,  according  to  this  scheme, 
the  ratio  of  rent  to  income  distributes  itself  in 
the  precise  manner  which  antecedently  will  have 
seemed  most  probable,  the  former  relatively  to 
the  latter  being  largest  when  the  latter  is  small, 
and  gradually  growing  less  and  less  in  propor- 
tion as  the  latter  increases.  Except  in  respect 
of  incomes  exceeding  .£5,000  a  year  (with 
regard  to  which  our  information  is  direct)  it 
cannot  of  course  be  pretended  that  the  fore- 
going figures  have  any  mathematical  accuracy; 

i.  This  is  the  average  for  more  houses  than  one.  The 
average  for  such  houses  singly  would  be  about  £330. 
There  are  about  1,000  houses  in  the  United  Kingdom  worth 
more  than  £900  a  year. 


M 


i8a  NATIONAL  INCOME  [Book  Hi. 

but  so  many  items  of  evidence  wholly  indepen- 
dent of  one  another  combine  to  support  them, 
that  they  may  be  taken  as  representing  correctly 
the  general  facts  of  the  situation.1 

And  now  the  main  results  of  the  survey  of 
national  income  as  a  whole,  which  has  formed 
the  substance  of  this  and  the  three  preceding 
chapters,  shall  be  briefly  recapitulated,  before 
we  go  on  to  a  detailed  examination  of  their 
significance. 

The  income  of  the  United  Kingdom  being, 
by  common  admission,  2,000  million  pounds, 
or  a  very  little  more,  it  appears  that  about  1,300 
million  is  made  up  of  individual  incomes  or 
earnings  none  of  which  exceeds  £160  a  year, 

i.  As  to  the  figures  given  in  the  text  relating  to  income* 
from  £160  to  ,£400,  and  ,£400  to  £1,000,  and  their  respective 
correspondence  to  houses  worth  from  £20  to  £40,  and  from 
£40  to  £100,  the  aggregate  of  incomes  in  each  group,  and 
the  aggregate  house  rental  for  each  group,  will  naturally 
form  parallel  percentages  respectively  of  the  aggregate  of 
incomes  up  to  ,£1,000,  and  the  aggregate  of  house  rentals 
up  to  £100.  The  substantial  correctness  of  the  estimates 
given  in  the  text  will  be  corroborated  by  an  examination 
of  the  complete  assessment  (for  they  are  not  all  complete) 
of  employees  (Schedule  E)  from  £160  a  year  up  to  £1,000. 
The  total  is  £97,000,000.  The  total  of  those  up  to  £400  is 
£55,000,000,  or  about  57  per  cent,  of  the  total  up  to  £1,000. 
The  total  rent  of  all  the  private  houses  in  Great  Britain 
from  £20  to  £100  is  £50,000,000.  The  total  rent  of  those 
worth  from  £20  up  to  £40  is  £31,000,000.  In  other  words, 
it  is  60  per  cent,  of  the  total  up  to  £100.  The  correspond- 
ence of  house  rent  to  increase  in  the  approximate  ratio  of 
i  to  10  is  thus  illustrated  by  five  sets  of  directly  ascertain- 
able  facts. 


Chap.  IV.]     DISTRIBUTION  OF  INCOMES  x8| 

the  average  income  per  recipient  being  just 
short  of  £70 ;  that  about  460  millions  is 
divided  amongst  1,330,000  recipients,  these 
consisting  of  two  groups — a  million  persons 
with  an  average  of  ^260  a  year,  and  less  than 
a  third  of  a  million  with  an  average  of  ^630 
a  year;  whilst  the  average  for  both  would  be 
j£33o;  and  that  a  sum  of  260  millions  remains, 
which  is  divided  amongst  about  74,000  reci- 
pients, and  would,  if  divided  equally,  yield  an 
income  per  head  of  ,£3,600,  but  which  is  as  a 
fact  divided  between  two  groups  into  more  than 
60,000  incomes  averaging  nearly  ,£2,000, 
and  about  n,ooo  incomes  averaging  ;£  12,000. 

It  has  been  farther  shown  that,  from  certain 
points  of  view,  the  significance  of  the  distribu- 
tion of  incomes  as  thus  generally  stated,  is 
largely  modified  by  the  fact  that  about  one-eighth 
of  the  total  income,  and  about  a  quarter 
of  the  total  subject  to  income-tax  is  imported 
into  this  country  from  abroad,  that  its  produc- 
tion involves  the  employment  of  no  home  labour 
whatsoever,  and  that  it  is  therefore  in  no  way 
comparable  with  any  wages  paid  in  the  United 
Kingdom. 

Many  of  these  facts,  if  taken  one  by  one, 
coincide  substantially  with  what  is  admitted  by 
social  reformers  themselves;  but  how  widely 
they  differ,  if  taken  as  a  whole,  from  the  general 
picture  which  social  reformers  draw,  will  be 
seen  from  the  examination  of  them  with  which 
the  following  Book  will  be  occupied. 


BOOK    IV. 

INCREASE  AND  DISTRIBUTION  OF  WEALTH 
FROM  THE  YEAR  1801  UP  TO  THE  PRESENT  TIME, 
THE  ACTUAL  FACTS  AS  COMPARED  WITH 
CURRENT  MISCONCEPTIONS. 


CHAPTER    I. 

THE  opening  chapters  of  this  work  were  devoted 
to  showing,  with  the  aid  of  certain  historical 
illustrations,  how  social  grievances,  regarded 
as  the  subject-matter  of  theories  or  projects  of 
reform,  are  made  up  of  one  or  of  another,  or  of 
both,  of  two  distinct  elements;  the  one  being  a 
consciousness  of  fact  directly  experienced,  the 
other  being  beliefs  about  fact  which  multitudes 
come  to  entertain,  but  which  are  often  altogether 
fallacious.  It  was  further  shown  that  the 
element  of  belief  becomes  more  and  more 
important,  and  at  the  same  time  more  liable 
to  error,  in  proportion  as  the  facts  involved 
become  more  complex  and  numerous.  Book 
II  was  devoted  to  showing  how,  in  the  case  of 
our  own  country,  belief  as  to  social  conditions 
has  actually  during  recent  times  been  vitiated 
by  errors  so  monstrous  and  so  profound  that  no 
sane  judgment  as  to  theories  or  projects  of 
reform  is  possible  for  those  by  whom  such  errors 
are  accepted.  Certain  typical  generalisations, 
constantly  repeated  by  reformers  as  essential 
elements  of  their  position,  were  examined  one 
by  one ;  they  were  contrasted  with  ascertainable 
facts  of  an  equally  comprehensive  character. 
But  this  survey  was  of  a  general  and  preliminary 
kind  only.  It  was  concerned  with  the  exposure 
of  fallacies  rather  thar  with  the  exposition  of 

187 


188  RICH  AND  POOR  [Book  IV. 

truths.  Accordingly  in  Book  III  a  detailed 
examination  of  facts  as  they  actually  are  to-day 
took  the  place  of  a  mainly  negative  criticism; 
and,  equipped  with  the  results  of  this,  we  are 
now  in  a  position  to  return  to  our  former  sub- 
ject, and  compare  the  realities  of  the  present 
and  a  more  or  less  recent  past  with  popular 
delusions,  in  many  precise  ways  which  were  not 
at  first  possible. 

Let  us,  then,  begin  with  considering  once 
more  the  proposition  which  all  modern  reformers 
take  as  their  common  starting-point,  and  see 
what  it  means  when  translated  into  exact 
terms.  This  proposition  in  its  general  form  is 
to  the  effect  that,  of  the  vast  increase  of  wealth 
which  for  more  than  a  hundred  years  has  been 
the  main  characteristic  of  the  progressive 
countries  of  the  world,  and  of  our  own  country 
in  particular,  the  larger  part  has  been  appro- 
priated by  a  very  limited  class,  and  that  all 
outside  this  class  have,  relatively  to  their 
numbers,  been  actually  growing  not  richer  but 
poorer;  whence  it  follows  that  all  projects  of 
reform  must  resolve  themselves  into  some 
scheme  whereby  the  supposed  accumulations 
of  the  few  may  be  broken  up,  and  so  distributed 
as  to  secure  individual  affluence  for  the  many. 
Now  the  general  idea  thus  expressed  is,  as  we 
have  seen  already,  by  no  means  peculiar  to 
reformers  of  the  more  extreme  kind.  The 
moral  imagination  of  Carlyle  and  the  political 
imagination  of  Disraeli  were  at  one  time  pro- 
foundly affected  by  it.  But  it  was  for  them  a 


Chap.  I.]    KARL  MARX  AND  HENRY  GEORGE        189 

general  idea  only.  It  was  too  indefinite  to  be 
tested,  or  to  form  the  basis  of  any  coherent 
policy.  It  only  became  influential  when  certain 
thinkers  adopted  it,  who  translated  its  implica- 
tions into  formulae  more  or  less  exact,  and 
presented  these  to  the  world,  and  induced 
multitudes  to  accept  them,  as  the  strictly 
scientific  outcome  of  elaborate  economic  analy- 
sis. Of  these  thinkers  there  are  two  who,  in 
virtue  of  the  influence  they  have  exercised, 
and  in  some  respects  of  their  remarkable  talents, 
stand  before  all  others.  These  thinkers  are 
Marx  and  Henry  George.  In  point  of  time  at 
all  events,  the  first  of  these  is  Marx.  Let  us 
then  consider  what  was  the  precise  form  or 
significance  with  which  Marx  invested  the 
doctrines  here  in  question. 

The  whole  secret,  according  to  him,  of 
modern  wealth  and  poverty  lies  in  the  process 
by  which  material  commodities  are  produced. 
Up  to  the  close  of  the  eighteenth  century,  he 
argued,  the  prevalent  method  of  production  was 
production  by  isolated  labourers  (such  as  the 
hand-loom  weavers),  or  small  groups  of  wage- 
earners  working  for  small  employers,  a  pro- 
minent feature  of  which  system  was  that  the 
labourers,  to  a  great  extent,  owned  the  imple- 
ments used  by  them,  whilst  even  those  owned  by 
the  masters  were  comparatively  few  and  simple. 
But  by  the  end  of  the  eighteenth  century  a 
change,  which  had  been  gradually  maturing, 
rapidly  became  general,  and  became  so  first  in 
England.  Not  only  the  tools  of  the  individual. 


igo  KARL  MARX  [Book  IV. 

but  the  simple  plant  of  the  small  workshop  also, 
gave  place  to  vast  mechanisms  actuated  by 
steam  or  water.  Workshops  disappeared  by 
the  dozen,  and  were  supplanted  by  single 
factories.  The  independent  craftsman,  the 
little  brotherhood  of  employees,  and  the  small 
master  himself  (their  implements  or  their  plant 
being  superseded),  alike  became  members  of 
larger  wage-paid  groups,  using  means  of  pro- 
duction which  were  no  longer  their  own  pro- 
perty. But,  so  Marx  continued,  there  was  no 
finality  here.  Just  as  during  the  early  years  of 
the  nineteenth  century  the  first  generation  of 
factories,  relatively  large  and  few,  swallowed 
up  the  independent  workers  and  the  last 
generation  of  workshops,  so,  shortly  afterwards, 
did  the  second  generation  of  factories,  fewer 
and  larger  still,  begin  to  swallow  up  the 
second.  This  process,  said  Marx,  had  been 
continuous  since  the  beginning  of  the  nineteenth 
century,  and  was,  at  the  time  when  he  wrote— 
that  is  to  say  about  sixty-five  years  later — daily 
becoming  more  rapid  and  general;  so  that  all 
the  productive  businesses  in  this  country  at  all 
events  would  soon  be  in  the  hands  of  a  few 
'great  factory  lords,"  who  owning  the  means  or 
mechanisms  of  all  effective  production  whatso- 
ever could  dictate  to  the  nation  the  terms  on 
which  the  nation  should  be  allowed  to  use  them. 
These  terms,  said  Marx,  are  at  once  simple  and 
inevitable.  In  return  for  allowing  the  nation 
to  produce  anything,  "  the  great  factory  lords  " 
will  demand  and  retain  everything,  except  so 


Chap  L]     ADMISSIONS  OF  SOCIALISTS  191 

much  of  the  product,  given  back  in  the  form 
of  wages,  as  will  enable  the  nation  tp  keep  body 
and  soul  together,  and  render  life  by  one  degree 
more  tolerable  than  suicide.  Wages,  indeed, 
though  for  two  generations  they  had  been 
declining,  had  not  yet  reached  their  absolutely 
irreducible  minimum,  nor  had  the  rich  secured 
as  yet  the  whole  surplus  wealth  of  the  Kingdom ; 
but,  writing  in  the  year  1865,  the  hour,  he  said, 
was  fast  approaching  when  such  a  situation 
would  be  realised;  and  then,  but  not  till  then, 
would  their  great  revolution  come.  It  would 
come  then,  but  it  would  not  come  before, 
because  in  order  that  multitudes  may  produce 
any  great  result,  all  must  be  compelled  to  act 
by  some  common  and  equal  pressure,  and  this 
pressure  must  be  such  that  inaction  is  no  longer 
tolerable. 

Here  we  see  the  meaning  of  those  three 
general  propositions,  that  the  rich  are  becoming 
ever  richer,  the  poor  are  becoming  ever  poorer, 
and  that  the  middle  classes  are  being  crushed 
out,  which  for  thirty  years  were  accepted  by 
socialists  as  indubitable.  Latterly  even  social- 
ists, in  so  far  as  they  are  serious  thinkers,  have 
been  driven  to  admit  that,  if  taken  in  their 
original  form,  these  propositions  are  greatly, 
perhaps  grossly,  exaggerated;  but,  subject  to 
certain  modifications,  they  are  still  regarded  as 
summaries  of  actual  facts  and  tendencies,  not 
only  by  socialists  but  by  radical  reformers  also. 
"All  the  new  wealth  that  is  year  by  year 
created,"  said  Mr.  Snowden  on  one  occasion, 


jya  MR.  MASTERMAN  [Book  IV. 

speaking  in  the  House  of  Commons,  "  goes 
to-day,  as  it  has  always  gone,  to  swell  the  riches 
of  those  who  were  enormously  rich  already  " ; 
whilst  the  lot  of  the  poor,  with  the  exception 
of  a  favoured  minority,  is,  in  consequence,  year 
by  year  growing  harder.  The  gap  in  Mr. 
Snowden's  argument  on  that  special  occasion 
was  subsequently  filled  up  by  Mr.  G.  B.  Shawr, 
who  declared  that  the  appropriations  of  the  rich 
have  now  become  so  inordinate  that  even  the 
middle  classes  are  ceasing  to  be  as  much  as 
barely  "comfortable";  and  the  moral  of  both 
these  alleged  facts  has  been  summed  up  by  Mr. 
Snowden  in  the  assertion  that  "  there  is  but  one 
way  under  heaven  by  which  the  poor  may  be 
made  richer,  and  that  is  by  making  the  very 
rich  few  poorer."  The  language  used  by 
radicals  is  essentially  the  same  in  purport.  Of 
the  radical  attitude  of  mind  with  regard  to  these 
particular  questions,  there  is  no  more  typical, 
and  no  more  elaborate  example,  than  that 
provided  by  a  book  to  which  reference  has 
been  made  already — "  The  Condition  of  Eng- 
gland,"  by  Mr.  Masterman.  Mr.  Master- 
man  indeed  admits,  though  in  somewhat  hesi- 
tating accents,  that  modern  wealth  in  this 
country  during  the  last  hundred  years  or  so, 
has  by  no  means  been  concentrated  to  such  an 
extent  as  Mr.  Snowden  supposes;  but  from  the 
beginning  of  his  book  to  the  end  of  it  his 
principal  thesis  is  that  "  superwealth  "  has  been 
concentrated  in  the  hands  of  one  small  and 
emphatically  novel  class  to  an  extent  so  unex- 


Chap.  I.]         THE  "  SUPERWEALTHY  "  195 

ampled,  so  preposterous  and  overwhelming, 
that  a  relative  if  not  absolute  poverty,  equally 
unexampled,  is  the  consequence. 

Now  if  statements  of  this  kind  have  any 
meaning  at  all,  their  meaning  must  be  one  which 
is,  from  its  very  nature,  susceptible  of  transla- 
tion into  more  or  less  precise  terms;  and  the 
first  thing  to  do  is  to  consider  the  precise  mean- 
ing which  the  persons  by  whom  such  statements 
are  made  attach  to  the  term  "  rich."  Who  are 
the  individuals  rich  enough  to  produce  such 
results  as  these? 

A  statistician,  who  has  made  himself  the 
mouth-piece  of  the  extreme  school  of  reformers, 
was  questioned  as  to  this  very  point  by  the  Select 
Committee  on  Income-tax;  and  he  answered 
that  any  man  had  reached  the  beginning  of 
"riches"  when  his  income  amounted  to  "  a  few 
thousands  a  year" — a  definition  which  harmon- 
ised with  the  view  then  under  discussion,  that  all 
incomes  in  excess  of  ,£5,000  a  year  might  fairly 
be  made  subject  to  a  super-tax;  but  the  persons 
whose  riches  were  distinctive  of  the  modern 
world,  and  of  this  country  in  particular — the 
persons  whose  riches  were  the  prime  cause  of 
poverty — were  persons,  he  said,  whose  incomes 
were  of  incomparably  greater  magnitude,  and 
had  indeed  never  been  paralleled  in  any  pre- 
vious period. 

Similarly,  Mr.  Masterman,  in  spite  of 
certain  vacillations  of  language,  ties  him- 
self down  to  the  assertion  that  "  the  super- 
wealthy,"  or  the  rich  in  the  typically  modern 


194     MR.  SNOWDEN  AND  MR.  HYNDMAN    [Book  IV. 

sense,  are  numerically  "  a  tiny  body,"  whose 
incomes  are  counted,  not  in  thousands  of 
pounds,  but  in  tens  of  thousands.  The  typical 
"rich,"  as  they  figure  in  Mr.  Snowden's  rhetoric, 
are  described  by  him  as  men  who  can  afford  to 
give  their  wives,  if  their  wives  are  silly  enough 
to  want  it,  £  10,000  a  year  to  spend  on  the 
ornamentation  of  their  own  persons. 

"  The  great  factory  lords,"  as  they  figure  in 
the  "scientific"  argument  of  Marx,  who  were  eat- 
ing up,  not  the  poor  only,  but  the  lesser  "lords" 
as  well,  were  certainly  no  less  affluent  than  the 
plutocrats  of  Mr.  Snowden's  vision;  as  we  may 
see  by  the  description  which  Mr.  Hyndman— 
Marx's  faithful  disciple — gives  of  the  outward 
signs    by    which    we    may    know    the    breed. 
According    to    Mr.     Hyndman,    the    modern 
factory  lord  is  almost  too  genteel  to  be  sure 
as  to  where  his  own  factory  is  situated ;  or  if 
he  does  condescend  now  and  then  to  have  a 
cursory  look  at  it,  he  merely  "  sits  in  a  chair, 
and   watches   the   machine   go."      During   the 
summer  months  he  is  to  be  found  in  Grosvenor 
Square,  or  some  similarly  desirable  neighbour- 
hood, where  his  huge   dining-room  is  full  of 
gold    plate   and   powdered    footmen.      In    the 
autumn  he  is  to  be  found  catching  salmon  in 
Norway  at  a  probable  cost  of  ^"100  per  fish ;  or, 
incurring  an  expense  still  greater,  he  is  lounging 
dressed  up  as  a  yachtsman,  nncl  smoking  a  huge. 
cigar,  on  a  floating  palace  which  rocks  itself  on 
the  smooth  waters  of  the  Solent. 

Such  descriptions  make  it  perfectly  evident 


Chap.  I)    GROUPS  OF  INCOMES  ANALYSED  195 

that  the  men  who,  according  to  the  doctrine  of 
modern  reformers,  from  Marx  down  to  Mr. 
Masterman  and  Mr.  Snowden,  are  so  rich  that 
their  riches  are  the  sole  or  the  principal  causes 
of  the  poverty  of  everybody  else,  cannot — to 
put  the  matter  in  a  very  moderate  way — be 
persons  whose  incomes  are  less  than  ,£20,000  a 
year. 

Let  us,  then,  take  this  doctrine  as  to  the 
distribution  of  modern  wealth  in  the  form  in 
which  Marx  stated  it,  and  test  it  by  comparing 
conditions  in  this  country  to-day  with  the  condi- 
tions corresponding  to  them  at  the  beginning 
of  the  nineteenth  century.  We  have  made  such 
a  comparison  in  a  rough  way  already.  We  are 
in  a  position  to  do  so  now  in  very  much  greater 
detail. 

In  the  year  1801  the  income  of  England— 
the  richest  (indeed  then  the  only  rich)  portion 
of  the  United  Kingdom — cannot,  as  we  have 
seen  already,  have  been  more  than  ^180,000,000. 
About  eleven  hundred  persons,  whom  here  we 
may  call  Class  A,  had  incomes  exceeding  ^5,000, 
their  aggregate  income  being  £  1 1 ,000,000. 
This  sum  being  deducted,  something  less  than 
^170,000,000  remained  for  the  rest  of  the 
population — about  9,000,000  persons.  These 
we  may  divide  into  three  groups,  B,  C  and  D ; 
Group  B,  comprising  half  a  million  persons, 
supported  on  incomes  ranging  from  ,£160  up 
to  ^5,000,  their  aggregate  income  being  about 
^"50,000,000;  Group  C,  representing  half  a 


I9&  MARX    ON    WAGES  [Book  IV. 

million  persons  more,1  who  were  supported  on 
incomes  ranging  from  £60  to  ;£i6o,  their 
aggregate  income  being  about  ^24,000,000; 
and  Group  D,  representing  8,000,000  persons, 
supported  on  incomes  none  of  which  exceeded 
£60  a  year,  their  aggregate  income  being 
^96,000,000,  and  the  average  per  head  £12. 

And  now  let  us  apply  to  these  data  the 
"  scientific  "  propositions  of  Marx,  which  are 
reproduced  in  the  reasoning  of  all  subsequent 
reformers,  and  see  what,  after  more  than  100 
years  of  capitalism,  the  condition  of  affairs 
must  be  in  this  country  to-day,  if  those  proposi- 
tions are  true. 

Let  us  begin  with  Groups  C  and  D,  which 
will  comprise  the  upper  and  the  lower  ranks  of 
the  then  wage-earning  population.  According 
to  Marxian  "  science,"  wages,  as  we  have  seen 
already,  tend  under  capitalism  to  sink  to  a  dead 
level,  and  that  level  itself  gradually  becomes 
lower  and  lower,  till  a  point  is  reached  below 
which  any  farther  reduction  would  be  literally 
inconsistent  with  the  maintenance  of  the 
workers'  lives.  If  such,  then,  be  the  case,  it 
is  obvious  that  after  more  than  100  years  of 
capitalism  two  things  will  have  happened  in 
this  country.  The  small  minority  of  wage- 
earners — about  6  per  cent,  of  the  total — who  in 
1 80 1  earned  more  than  £60  a  year,  will  have 
had  their  wages  reduced  to  what  then  was  the 

i.  This  half  million  comprised,  according  to  the  income- 
tax  returns  for  1801,  about  250,000  actual  workers,  earning 
from  22S.  to  628.  a  week. 


Chap.  I.]  GROUPS  OF  INCOMES  197 

general  average  amongst  the  vast  majority; 
and  that  average,  which  was  then  £12  per  head 
of  the  wage-earning  population  and  their 
families,  will  by  this  time  be  appreciably  less. 
We  may  safely  say  that  it  will  not  be  more  than 
^10. 

Next,  as  to  the  persons  comprehended  in 
Group  B,  whose  incomes,  whilst  greater  than 
those  of  the  best-paid  wage-earners,  were  less 
than  those  of  the  poorest  of  the  conspicuously 
rich;  under  the  influence  of  capitalism  the  fate 
of  such  persons  as  these  is,  according  to  the 
"  science "  of  Marx,  "  to  be  crushed  out  of 
existence."  It  is  obvious,  therefore,  that  after 
capitalism  has  been  crushing  them  for  more 
than  a  hundred  years,  they  will  at  all  events  be 
not  more  numerous  to-day  than  they  were  when 
the  general  process  of  "crushing  them  out" 
began. 

And  now  let  us  apply  these  generalisations 
to  the  actual  figures  in  question. 

Groups  C  and  D — namely  the  wage-earners 
of  England  and  their  families — formed  together 
in  the  year  1801  a  population  of  about  8,500,000 
persons.  The  population  of  the  United  King- 
dom to-day  is  five  times  as  great  as  the  popula- 
tion of  England  then.  If,  therefore  (for  such 
is  our  hypothesis),  the  middle  classes  have 
remained  stationary,  the  wage-earnmgf  or  the 
"  expropriated  "  classes  of  the  United  Kingdom 
and  their  families  will  by  this  time  have  come 
to  constitute  very  nearly  the  entire  population : 
their  present  number  will  be  about  44,000,000 


198  "  EXPROPRIATORS  "  [Book  IV. 

persons,  and  their  average  income  having  sunk 
to  ,£10  per  head,  their  aggregate  income  will 
be  about  ^440,000,000. 

Group  B,  which  we  are  here  supposing  to 
have  been  only  "  crushed  out "  in  the  sense 
that  its  numbers  have  not  exhibited  any  actual 
increase,  will  to-day,  if  the  theory  of  Marx  be 
true,  be  no  richer  than  it  was  in  the  year  1801, 
when  its  aggregate  income  was  not  quite  so  much 
as  ^"50,000,000.  It  is  therefore  obvious  that  the 
wage-earning  classes  of  the  United  Kingdom, 
together  with  the  classes  whose  incomes, 
though  greater  than  those  of  the  wage-earners, 
do  not  exceed  the  sum  of  ,£5,000  a  year,  will 
to-day  divide  between  them,  if  the  theory  of 
Marx  be  true,  an  aggregate  income  which 
may  approach,  but  cannot  possibly  exceed, 
^500,000,000.  Whatever  may  be  the  income 
of  the  country  over  and  above  this  will  be  taken 
by  the  great  "  expropriators."  Even  if  these 
be  held  to  include  everyone  now  subject  to 
super-tax,  the  majority  of  them,  and  most  of 
their  aggregate  income,  must,  according  to  the 
reformers  (if  their  language  means  anything)  be 
represented  by  the  men  whom  Mr.  Masterman 
describes  as  the  "  tiny  body  "  of  the  "  super- 
wealthy  "  —by  the  men  who,  according  to  Mr. 
Snowden,  were  "  enormously  rich  already  "  a 
hundred  years  ago,  and  to  whom  "every  increase 
of  wealth  "  has  continued  to  go  since — by  the 
men  whom  Mr.  Hyndman  describes  as  the 
"  lords  of  palatial  yachts  "  —by  the  men  who, 


Chap.  I.]  RELATIVE  WEALTH  igg 

as  has  here  been  very  modestly  stated — cannot 
have  less  than  a  trifle  of  ^"20,000  a  year. 

Now,  however  absurd  such  a  conclusion 
might  seem  on  the  face  of  it,  there  would,  unless 
there  were  some  means  of  checking  it,  be  a 
difficulty  in  proving  its  incorrectness  in  any 
precise  way.  But  such  means  exist,  and  they 
consist  of  a  reference  to  facts,  very  precise  in 
kind,  which  are  not  disputed  by  the  most 
extreme  amongst  the  reformers  themselves. 

One  of  these  is  the  fact  that  the  income  of  the 
United  Kingdom  amounts  to-day  to  something 
over  .£2, 000,000,000.  Now  from  this  it  follows 
that  if,  after  more  than  a  century  of  capitalism, 
the  mass  of  the  population  has,  relatively  to  its 
numbers,  become  poorer  rather  than  richer  than 
it  was  at  the  beginning  of  the  nineteenth  cen- 
tury, the  total  sum,  which  the  men  whose 
incomes  run  to  tens  of  thousands  of  pounds,  are 
year  by  year  abstracting  from  the  mass  of  their 
fellow  countrymen,  must  amount  by  this  time 
to  considerably  more  than  fifteen  hundred 
millions.  Here  is  a  conclusion  which  at  all 
events  has  the  merit  of  being  definite.  Is  such 
a  conclusion,  then,  anywhere  near  the  truth? 

The  question  can  be  answered  by  another  of 
the  facts  referred  to.  This  is  the  fact  that, 
after  a  prolonged  and  searching  inquisition  by 
the  Commissioners  of  Inland  Revenue,  the 
actual  total  of  all  incomes  exceeding  ,£20,000 
a  year  has  been  now  definitely  ascertained ;  and 
that  total,  according  to  the  latest  returns,  is 
,£56,200,000.  Instead  of  being  1,500  millions, 


200  HENRY  GEORGE  [Book  IV. 

it  is  very  little  more  than  one-thirtieth  part  of 
it.  Here  we  have,  on  the  one  hand,  the  exist- 
ing situation  as  it  would  be  if  the  "  scientific  " 
reasoning  of  Marx,  and  of  those  whom  he  still 
influences,  were  correct;  and  here  we  have,  on 
the  other  hand,  the  microscopic  mouse  of  reality 
which  the  touch  of  frigid  truth  elicits  from  the 
labouring  mountain. 

To  the  future  student  of  the  history  of 
popular  beliefs,  it  may  well  seem  astonishing 
that  the  Marxian  estimate  of  the  growth  of  the 
conspicuously  rich  should  not  only  have  com- 
manded for  years  the  unquestioning  assent  of 
millions,  but  should  still  in  all  its  essentials 
dominate  the  minds  of  reformers  who  regard 
themselves  as  judicial  thinkers,  and  proficients 
in  social  science.  But  before  we  allow  ourselves 
to  dwell  upon  this  point  farther,  let  us  turn 
from  Marx  to  that  other  thinker,  Henry  George, 
whose  influence  is  more  recent,  and  has  perhaps 
been  even  more  extensive. 

Although  it  appears  from  letters  published 
after  his  death  that  George  knew  nothing  of 
Marx  otherwise  than  by  vague  report,  and  had 
never  read  so  much  as  a  single  page  of  his  writ- 
ings, his  estimate  of  social  tendencies  in  the 
modern  world  and  the  estimate  of  Marx  are  in 
certain  respects  identical,  and  expressed  in 
almost  the  same  language.  What,  George  asked, 
are  the  two  great  facts  by  which  all  progressive 
countries,  and  England  more  than  any  other, 
have  been  distinguished  under  the  capitalistic 
system  ?  One,  he  said,  was  an  enormous  increase 


Chap.  I.]         H.  GEORGE'S  THEORIES  aoi 

of  wealth;  the  other  was  a  concurrent  increase, 
no  less  enormous,  of  poverty.  And  what  was 
the  explanation  of  this  appalling  paradox  ?  In 
its  general  form,  his  answer  was  precisely  that 
of  Marx.  The  explanation,  he  said,  lay  in  the 
fact  that  as  fast  as  wealth  increased,  indeed  on 
the  whole  faster,  it  was  appropriated  by  one 
small  group  of  persons  who  constantly  grew 
richer  and  richer  whilst  everybody  else  grew 
poorer.  Up  to  this  point  his  agreement  with 
Marx  was  complete;  but  when  it  came  to  the 
question  of  who  the  plunderers  were  the  answer 
of  one  sage,  in  the  most  sensational  way,  con- 
tradicted that  of  the  other.  According  to  Marx, 
these  persons  were  the  factory  lords,  or  capi- 
talists. According  to  George  they  were  the 
owners  of  the  prairie  value  of  land.  So  far 
were  the  wicked  capitalists  from  victimising  the 
poor  labourers,  that  the  poor  labourers,  and  the 
poor  capitalists  along  with  them,  were  victimised 
by  the  wicked  landlords. 

Stated  in  precise  form,  his  fundamental  pro- 
position was  this : — that  in  whatever  ratio  the 
income  of  any  progressive  country  increases, 
the  portion  of  it  which  is  taken  by  landowners  as 
the  rent  of  crude  land,  or  land-rent  as  distinct 
from  interest  on  human  improvements,  constantly 
increases  in  a  ratio  greater  still.  If  the  total 
income  within  a  given  period  doubles  itself, 
land-rent  will  within  the  same  period  have  trebled 
itself,  and  so  the  process  will  continue  till  "the 
earnings  of  capital  "  (as  he  put  it)  no  less  than 
"  the  wages  of  labour  "  are  so  far  absorbed  by 


903  H.  GEORGE'S  THEORIES        [Book  IV. 

land-rent  that  the  landowners  appropriate  the 
entire  and  increasing  difference  between  the 
total  of  the  national  product,  no  matter  how 
great,  and  the  amount  which  is  just  sufficient  to 
keep  the  rest  of  the  population  alive. 

This  doctrine,  which  he  deduced  from  his 
observation  of  affairs  in  America,  was,  he  said, 
exemplified  to  an  extent  still  greater  in  England, 
where  the  process  in  question  had  been  operative 
for  a  very  much  longer  time;  and  early  in  the 
"  eighties  "  he  made  his  appearance  in  London 
for  the  purpose  of  informing  Englishmen  of 
this  remarkable  fact.  The  case  in  England, 
and  indeed  in  the  United  Kingdom,  was,  he 
said,  singularly  simple.  There  was  no  need 
for  statistics.  The  salient  facts  were  matters 
of  common  knowledge.  The  whole  soil  of 
these  islands  was  owned  by  a  class  which  could 
be  at  once  identified — that  is  to  say,  by  the 
lords  and  the  country  gentlemen.  They  were 
enormously  wealthy  a  hundred  years  ago;  and 
every  year  that  enormous  wealth  increases,  not 
because  they  own  more  acres  (for  that  would  not 
be  passible),  but  because  relatively  to  the  in- 
creasing wealth  of  the  country,  an  ever  increas- 
ing sum  is  exacted  for  each  acre ;  the  result 
being — such  was  the  upshot  of  his  reasoning 
thirty  years  ago — that  the  prairie  rent  appro- 
priated by  the  great  landlords  already  amounted 
to  the  overwhelming  and  unimaginable  sum 
which,  so  far  as  the  rest  of  the  nation  was 
concerned,  divided  increasing  poverty  from  a 
general  and  increasing  affluence. 


Chap.  I.]  THE  ACTUAL  FACTS  203 

Now  as  to  the  application  of  his  doctrines 
to  this  country,  George  was  in  one  way  right. 
The  questions  raised  by  it  are  simple  to  an 
extreme  degree.  Although  he  himself  was 
totally  unaware  of  the  fact,  we  know  by  direct 
evidence  what,  during  a  hundred  years  and 
more,  the  actual  land-rent  of  this  country  at 
successive  dates  has  been.  We  are  also  able  to 
compare  its  amount  and  increase  with  the 
amount  and  increase  of  incomes  derived  from 
other  sources;  and  the  first  fact  which  is  dis- 
closed by  even  the  most  cursory  examination 
of  the  data  is  that  the  doctrine  on  which  the 
whole  fabric  of  George's  reasoning  rests  is  a 
fallacy  so  fantastic  that  its  birth-place  might 
have  been  a  cell  in  Bedlam.  If  any  fact  of 
economic  history  is  more  indubitably  demon- 
strable than  another,  this  is  the  fact  that  land- 
rent  in  this  country,  relatively  to  the  national 
income,  is  a  fraction  which,  instead  of  increasing 
constantly  grows  less  and  less.  In  the  year 
1801  the  land-rent  of  England  and  Wales 
amounted  to  20  per  cent,  of  a  total  income  of 
;£  1 80,000,000.  To-day,  out  of  a  total  income 
of  more  than  ^2,000,000,000,  it  barely  amounts 
to  so  much  as  4  per  cent. 

But  what  principally  concerns  us  here  is  not 
George's  theory  as  such,  but  the  actual  state 
of  affairs  at  the  present  time,  as  compared 
with  that  state  as  it  would  be  were  George's 
theory  true.  If  we  substitute  great  landlords 
for  great  owners  of  factories,  it  would  be 
similar  to  that  deducible  from  the  rival 


204  THE  ACTUAL  FACTS  [Book  IV. 

theorising  of  Marx.  The  bulk  of  the  popula- 
tion of  Great  Britain  and  Ireland  would 
to-day  be  subsisting  on  an  income  of  about 
;£ 5 00,000,000 ;  and  the  peers  and  the  country 
gentlemen — the  only  rich  men  in  the  Kingdom 
—would,  as  the  owners  of  the  crude  or  unim- 
proved soil,  be  appropriating  a  rental  of  more 
than  ,£1,500,000,000.  What  are  the  actual 
facts  ?  If  from  the  definitely  known  rental  of  the 
United  Kingdom  we  deduct  that  portion  only 
which  consists  of  interest  on  buildings  and  other 
works  of  construction,  and  treat  all  interest  on 
agricultural  improvements  as  land-rent,  the 
entire  net  rental  of  rural  and  urban  land  does 
not  amount  to  so  much  as  ^"80,000,000.  Of 
this  sum,  as  we  have  seen  in  a  former  chapter, 
about  ^12,000,000  goes  to  charitable  bodies  and 
to  more  than  a  million  and  a  half  of  very  small 
owners,  none  of  whom  have  incomes  in  excess 
of  ,£160;  whilst  about  ^S^oOjOOO1  goes  to  per- 
sons who  have  satisfied  the  Commissioners  of 
Income-tax  that  their  incomes  from  all  sources 
are  not  in  excess  of  ^700.  How  much,  then, 
remains  for  the  great  landowners,  the  peers  and 
the  country  gentlemen,  the  monsters  of  George's 
imagination,  whose  exactions  in  the  form  of  land- 

i.  The  amount  of  abatements  (Schedule  A)  granted  on  rent 
going  to  persons  with  not  more  than  ^700  a  year,  is  about 
,£11,500,000,  which,  from  the  interesting  analogy  afforded 
by  abatements  under  Schedule  E,  appears  to  be  rather  less 
than  half  of  the  total,  which  would  in  this  case  be  about 
^24,000,000.  Of  this  one-third  may  be  taken  as  land-rent, 
the  remainder  being  the  rent  of  buildings. 


Chap.  I.]  LAND-RENT  205 

rent  are  so  colossal  that  they  have  reduced  the 
capitalists  to  poverty,  and  those  employed  by 
the  capitalists  to  destitution?  Even  if  every- 
body should  be  called  a  great  landowner  whose 
estate  consists  of  more  than  1,000  acres,  the 
total  land-rent  going  to  such  persons  cannot 
by  any  possibility  amount  to  as  much  as 
^40,000,000.  The  land-rent  of  all  estates 
worth  more  than  ,£10,000  a  year  cannot  amount 
to  more  than  <£2o,ooo,ooo,1  of  which  about  one- 
seventh  is  probably  derived  from  London.8 
But,  without  insisting  on  these  latter  details, 
let  us  make  George  a  present  of  the  land-rent 
of  all  estates  sufficient  to  support  an  owner  in 
the  leisure  of  even  a  struggling  gentleman ;  and 
^"40,000,000  a  year  is  a  greatly  exaggerated 
estimate  of  the  sum  which  he  would  find  in  his 
hands  were  he  still  alive  to  claim  it.  He  would 
find  ,£40,000,000,  whereas  if  there  were  any 
truth  in  his  one  cardinal  doctrine  the  least  he 
would  find  to-day  would  be  very  nearly  forty 
times  as  much. 

Even  the  doctrine  which  persons  like  Mr. 

1.  According  to  the  New  Domesday  Book,   the  gross 
rental  value  of  estates  of  more  than  10,000  acres  (buildings 
included)  was  about  one-sixth  of  the  gross  rental  surveyed. 
The  gross  rental  of  estates  exceeding  1,000  acres  was  about 
one-third  of  the  total.    The  figures  in  the  text,  therefore, 
err  on  the  side  of  excess.     (See  Statistical  Monograph,  i.) 

2.  The  current  assertion  of  reformers  is  that  the  land  of 
London  is  owned  by  eight  persons.    The  number  of  owners 
who  have  been  identified  by  the  London  County  Council  is 
about  35,000.    (See  Statistical  Monograph,  i.) 


206  THE   SUPER  WEALTHY  [Book  IV, 

Masterman  and  Mr.  Snovvden  have,  consciously 
or  unconsciously,  inherited  from  the  "science"  of 
Marx  becomes  reasonable,  if  judging  it  by  its 
results,  we  compare  it  with  this  doctrine  of 
George.  If  the  doctrine  of  Marx  be  tested  by 
actual  facts,  the  great  factory  lords  and  other 
mammoths  of  superwealth,  with  their  palaces 
and  their  huge  yachts,  with  their  wives  who  spend 
;£  1 0,000  a  year  on  their  petticoats,  and  whose 
very  dogs,  Mr.  Snowden  complains,  look  at 
him  through  motor-goggles — these  super- 
wealthy  persons  can  at  least  be  definitely  shown 
to  possess  between  them  an  income  of 
^56,000,000.  Indeed  if  we  so  far  extend  our 
definition  of  the  superwealthy  as  to  include 
everybody  whose  income  is  in  excess  of  .£5,000, 
which  is  only  half  of  what,  according  to  Mr. 
Snowden,  the  ladies  of  the  class  in  question 
can  afford  to  spend  at  their  dressmakers,  this 
class,  whose  wealth  reduces  the  rest  of  the 
nation  to  poverty,  can,  exclusive  of  what  it 
derives  from  abroad,  be  shown  to  possess  an 
income  of  about  £  1 00,000,000 :  whereas  if  we 
include  in  the  exactions  of  the  great  landowners 
the  rental  of  every  harassed  squire  who  can 
barely  make  both  ends  meet,  and  is  lucky  if  he 
can  drive  his  wife  to  the  train  in  a  pony-trap,  the 
Georgian  superwealth  of  the  country  will  not 
amount  to  one  half  of  the  Marxian;1  and  whilst 

i.  Even  if  we  include  the  rent  of  buildings,  rent  has  not 
increased  in  accordance  with  the  monstrous  theory  oi 
George.  Tn  the  year  1862  the  gross  rent  of  lands  and 
houses  was  ^114,000,000.  In  1906  it  was  £222,000,000 — an 


Chap.  IJ  MR.  MASTERMAN  AND  MR.  SNOWDEN  207 

the  income  of  the  country  has  risen  to  more 
than  ;£  2, 000,000,000,  even  the  superwealth  of 
the  Marxian  expropriators  will  barely  be  5  per 
cent,  of  it. 

Let  us,  then,  put  into  its  simplest  form  the 
doctrine  preached  to  the  nation  by  those  who, 
like  Mr.  Masterman  and  Mr.  Snowden,  and 
other  typical  reformers,  declare  that  contem- 
porary poverty,  whatever  may  be  its  character 
or  extent,  is  due  to  the  fact  that  the  super- 
wealthy  are  appropriating  an  increasing  per- 
centage of  the  income  of  the  United  Kingdom ; 
and  what  will  this  doctrine  come  to  when 
translated  into  terms  of  fact?  In  order  to 
realise  what  it  will  come  to,  let  us  reconsider 
the  following  particulars.  The  income  of  the 
population  of  England  (the  richest  portion  of 
the  United  Kingdom)  was  £20  per  head  in  the 
year  1801.  The  income  per  head  of  the  popu- 
lation of  the  United  Kingdom  is  ^"45  to-day. 
Thus  if  it  were  not  for  the  appropriations  of 
persons  whose  incomes  exceed  ,£5,000  or 
^"20,000  a  year,  the  average  for  the  population 
at  large  would  by  this  time  have  more  than 
doubled  itself.  The  population  at  large  may, 
then,  be  compared  to  a  lon^-lived  individual, 
who  a  hundred  years  ago  had  an  income  of 


increase  of  95  per  cent.  The  income  from  "  trades  and 
professions  "  (Schedule  D)  increased  during  the  same 
period  by  455  per  cent.  Between  1885  and  1906,  land-rent, 
apart  from  building-rent,  increased  by  5-^  per  cent.  Income 
from  trades  and  professions  increased  by  85  per  cent. 


4o8  A  CHILDISH  THEORY  [Book  IV, 

^200  a  year;  and  the  superwealthy  may  be 
compared  to  an  agent  who  collected  this  income 
for  him,  and  charged  a  commission  for  doing 
so.  The  gross  income  of  the  former,  according 
to  the  admission  of  everybody,  will  by  this  time 
have  risen  in  the  proportion  of  24  to  45 ;  and 
Marx,  George,  Mr.  Masterman,  Mr.  Snowden, 
and  their  reforming  kindred,  are  like  persons 
who  should  inform  him  that,  instead  of  being 
richer,  he  was  now  poorer  than  ever,  because  the 
agent,  who  had  charged  6  per  cent,  for  collect- 
ing ,£200  in  the  year  1801,  now  charges  5  per 
cent,  for  collecting  ^450. 

Such  is  the  childish  and  at  the  same  time 
astounding  absurdity  to  which,  when  translated 
into  the  disenchanting  language  of  figures,  that 
theory  of  superwealth  as  the  cause  of  an  increas- 
ing poverty  reduces  itself,  which  is  the  basis 
to-day  of  all  projects  of  extreme  reform,  and 
determines  not  only  the  reasoning  of  reformers 
with  regard  to  individual  problems,  but  provides 
them  in  each  case  with  the  outlines  of  some 
foregone  and  usually  wrong  conclusion.  In 
all  human  societies  there  have  always  been 
grave  evils.  The  society  of  to-day  may  have 
evils  peculiar  to  itself;  but  whatever  these  may 
be,  and  however  grave  they  may  be,  one  thing 
at  least  is  certain.  Their  origin,  and  the  means 
by  which  they  may  be  cured  or  mitigated,  are 
not  those  which  the  reformers  of  to-day  sup- 
pose. 

Radicals  like  Mr.  Masterman,  and  socialists 
like  Mr.  Snowden,  may  no  doubt  say  with 


Chap.  IJ  MODERN    REFORMERS  309 

truth  that  they  dissociate  themselves  from 
certain  exaggerations  of  which  Marx  and 
George  were  guilty;  but  the  fallacy  of  their 
position  is  thereby  not  radically  altered.  The 
error  of  Marx  and  George  is  not  a  mere 
exaggeration  of  facts.  It  is  a  positive  and 
direct  inversion  of  them.  Marx  and  George 
were  both  of  them  like  a  passenger  in  a  south- 
bound train,  who  with  glaring  eyes  should 
announce  to  a  couple  of  fellow  travellers  that 
they  were  hurrying  north  at  a  speed  of  twa 
hundred  miles  an  hour.  Mr.  Masterman,  Mr. 
Snowden,  and  other  reformers  of  to-day  are 
like  travellers  who,  looking  with  an  air  of  great 
calm  at  their  watches,  should  announce  to  their 
informant  that  their  speed  was  considerably 
less  than  he  thought  it  was ;  but  who  joined  with 
him  in  yelling  that  they  were  being  taken  from 
York  to  Edinburgh,  when  all  the  while  they 
were  being  taken  from  York  to  London. 

It  is  not  contended  that,  with  regard  to  details 
here  and  there — many  of  them  of  grave  impor- 
tance— the  most  extreme  reformers  may  not  be 
perfectly  correct;  but  such  details  as  they  see 
correctly  are  placed  by  them  in  a  wrong  setting, 
which  prevents  them  from  perceiving  their 
significance  as  parts  of  a  general  system  of 
things — whether  a  system  of  things  as  they  are 
at  any  moment,  or  a  system  regarded  as  chang- 
ing from  one  condition  to  another. 

If  social  conditions,  then,  in  the  United 
Kingdom,  are  so  radically  different  from  whr.t 
reformers  declare  them  to  be,  in  respect  both  of 


aio  MODERN    REFORMERS  [Book  IV. 

their  present  character,  and  of  their  present 
character  as  compared  with  their  character 
during  the  recent  past,  let  us  with  the  aid  of 
the  facts  which  are  now  before  us,  endeavour 
to  summarise  in  a  generally  intelligible  form 
what,  with  regard  both  to  the  production  and 
distribution  of  wealth,  has  really  taken  place 
since  the  beginning  of  the  nineteenth  century. 


CHAPTER  II. 

LET  us  once  more  review  the  general  condition 
of  things  as  it  was  in  the  year  1801 ;  and  follow 
so  far  as  we  can  the  very  remarkable  changes 
which  each  of  its  salient  features  has  undergone 
between  then  and  now. 

The  population  of  England  and  Wales  was 
then  9,000,000.  The  direct  recipients  of 
incomes  whether  earned  or  otherwise,  numbered 
slightly  more  than  4,000,000.  Of  incomes 
exceeding  ^160,  each  is  commonly  computed  to 
represent  a  family  of  five  persons.  Of  incomes 
below  that  limit,  the  number  may  with  sufficient 
accuracy  be  taken  as  about  one  half  of  the 
number  of  the  persons  supported  by  them.  The 
then  number  of  incomes  exceeding  ^160  a  year 
was  about  100,000,  the  population  supported  by 
them  then  amounting  to  half  a  million.  The 
number  of  incomes  between  £80  and  ^"160  was 
slightly  but  not  much  smaller,  the  population 
supported  by  them  amounting  to  about  a  quarter 
of  a  million;  whilst  the  rest  of  the  nation,  or 
more  than  8,000,000  persons,  were  supported 
on  incomes  which  did  not  exceed  ,£80,  and  of 
which  only  one  in  everv  twenty  amounted  to 
more  than  ^60. 

And  now,  subdividing  these  groups,  as  we  did 
in  an  earlier  chapter,  let  us  see  what,  according 
to  the  income-tax  returns  for  the  time,  was  the 

211 


aia  THE   NATIONAL    INCOME       [Book  IV. 

aggregate  income  of  each.  The  aggregate  of 
incomes  in  excess  of  ,£5,000  a  year  was 
;£  1 1, 000,000;  that  of  incomes  between  ^"1,000 
and  ^5,000  was  about  ^21,000,000;  that  of 
incomes  between  £160  a  year  and  ^1,000  was 
about  ,£28,000,000;  that  of  incomes  between 
£So  and  ^160,  was  about  ^"10,000,000;  whilst 
£i  10,000,000  was  the  income  of  the  rest  of  the 
nation,  and  £  1 80,000,000  the  income  of  all 
these  groups  together. 

Now  the  entire  income  of  the  United  King- 
dom to-day  is  nearly  twelve  times  as  great  as 
the  income  of  England  and  Wales  in  the  year 
1801,  the  excess  of  the  latter  sum  over  the 
former  amounting  to  appreciably  more  than 
i, 800  million  pounds.  How,  then,  may  these 
two  sums  be  compared,  so  that  the  increase  may 
disclose  most  clearly  its  true  social  significance  ? 
The  question  will  be  sufficiently  simple  if  we 
assume  roughly  that  conditions  in  England  and 
Wales  at  the  beginning  of  the  nineteenth 
century  were  similar  to  those  of  the  United 
Kingdom  as  a  whole,  and  remember  that  the 
population  of  the  United  Kingdom  to-day  is 
to  the  population  of  England  and  Wales  then, 
almost  exactly  in  the  proportion  of  five  to  one. 
For,  these  premises  being  given,  one  result  is 
self-evident.  If  we  suppose  that  the  income 
of  England  and  Wales  as  it  then  was,  has  in 
respect  both  of  its  total  amount  and  the  amount 
of  each  group  of  incomes  into  which  it  v/ns  th^n 
divided,  been  multiplied  by  five,  we  shall  get  n 


Chap.  II.] 


GROUPS    OF    INCOMES 


213 


condition  of  things  as  it  would  be  at  the  present 
day,  if  the  amount  and  distribution  of  wealth 
had  changed  in  one  way  only;  that  is  to  say, 
if,  its  proportional  distribution  being  constant, 
it  had  merely  increased  in  the  same  ratio  as  the 
population.  In  that  case,  from  the  point  of 
view  of  the  individual,  everything  would  be 
exactly  as  it  was  at  the  beginning  of  the  nine- 
teenth cenury.  Every  class  would  be  larger; 
but,  relatively  to  other  classes,  its  magnitude 
would  remain  unaltered;  and  no  individual,  to 
whatever  class  he  belonged,  would  have  more 
to  spend  or  less  to  spend  on  the  necessaries  and 
superfluities  of  life  than  his  great-grandfather 
had  a  hundred  and  ten  years  ago. 

Let  us  see  in  detail  how,  had  the  course  of 
events  been  such,  matters  would  stand  to-day. 
For  this  purpose  all  that  we  have  to  do  is  to 
turn  to  the  groups  of  incomes,  as  just  now  given, 
which  in  the  year  1801  made  up  the  total  income 
of  about  9,000,000  persons,  and  multiply  the 
aggregate  amount  in  the  case  of  each  group  by 
five.  The  figures  will  be  as  follows : — 


Aggregate  in. 

come  per  group 

as  it  would  be 

Aggregate  in- 

to-day,  had  the 

oome  per  group, 

increase  been 

M  it  was  in 

proportionate  to 

R*nge  of  Income*. 

the  year  1801. 

the  general  in- 

crease of  the 

population. 

Fxceedinsr  £1  000/°ver  £'5'000 
lul&  *1)UUU\£1,000—  £5,000  .. 

.  £11,000,000    ,. 
.     21,000,000    .. 

.    £55,000,000 
.     105,OOU,000 

£160—  £1,000.. 

.     28,000,000    .. 

.     140,(K30,000 

Not  exceeding  ...       £160      

.    120,000,000   .. 

.     60U,(£X),000 

180,000,000  ...  900,000,000 


ai4  DISTRIBUTION  OF  WEALTH       [Book  IV. 

Now  if  such  were  all  that  "material  progress" 
had  accomplished,  it  would  have  accomplished 
one  miracle  at  all  events.  It  would  have 
enabled  within  the  limits  of  a  small  geogra- 
phical area  a  vastly  greater  number  of  human 
beings  to  live,  than  ever  lived  or  could  have 
possibly  lived  within  them  before;  but  no  indi- 
vidual human  being  would  be  a  penny  the  better 
or  the  worse  for  it  than  members  of  his  class 
would  be  had  there  been  no  progress  at  all. 
What,  however,  are  the  actual  facts  ?  It  will  be 
seen  from  the  above  table  that,  if  wealth  had 
merely  increased  in  proportion  to  the  increase 
of  the  population,  the  entire  income  of  the 
United  Kingdom  to-day  would  not,  at  the 
utmost,  be  more  than  ^900,000,000.  It  is  in 
reality  more  than  double  that  sum,  exceeding 
it  by  no  less  than  ^1,120,000,000;  and  here- 
in this  additional  sum — we  see  what,  relatively 
to  its  numbers,  the  population  has  really  gained. 

The  situation  to-day  is  what  it  would  be  if 
Fate  had  found  the  population  in  respect  of 
wealth  and  its  distribution  no  richer  and  no 
poorer  per  head  of  its  various  classes  than  it 
was  more  than  a  century  ago,  and  if,  con- 
densing the  results  of  progress  into  a  single 
dramatic  moment,  it  had  made  the  popula- 
tion a  present  of  an  additional  income  of 
^"1,120,000,000,  and  allowed  its  members  to 
divide  it  according  to  their  own  abilities.  The 
practical  question,  therefore,  virtually  comes  to 
this  : — in  what  condition  of  things  has  the  divi  - 


Chap.  II.] 


THE  SUPERWEALTHY  " 


sion  as  a  fact  resulted?  This  shall  be  shown 
by  means  of  another  table.  The  income  of 
each  group  shall,  in  the  first  place,  again  be 
given,  as  it  would  have  been  had  the  national 
total,  in  respect  both  of  its  amount  and  its 
distribution,  merely  kept  pace  with  the  increas* 
ing  number  of  the  population.  Secondly  in 
the  case  of  each  group  shall  be  given  its  aggre- 
gate income  as  it  actually  is  to-day ;  and  thirdly, 
in  each  case,  the  excess  shall  be  given  of  the 
latter  sum  over  the  former,  which  will  show  the 
proportion  secured  by  each  class  of  the  popula- 
tion of  the  total  increment  of  ;£  1,12 0,000,000. 


Aggregate  income 

of  each  group  as  it                                          Increases  in 

would  be  to-day,                                       aggregate  income 

JUnge  of  Income* 

bad  wealth  increased  Aggregate  income    of  each  group  :  — 

•omprised  in  each 

since  1801  in  the      of  each  group  as  it       i.«.,  net  gain 

group. 

eame  ratio  as  the      actually  is  to-day,     relatively  to  th« 

population.                                                  population. 

Oer  £5,000 

...  £55,000,000    ..  £130,000,000  . 

£75,000,000 

£1,000-  £5,000 

...    105,000,000 

..      130,000,000  . 

25,000,000 

£160—  £1,000 

...    140,000,000 

..      460,000,000  . 

320,000,000 

Not  over  £160 

...   600,000,000 

..  1,300,000,000  . 

700,000,000 

900,000,000 

..  2,020,000,000  . 

1,120,000,000 

Here,  then,  we  have  an  answer  in  substan- 
tially accurate  detail  to  the  stock  question  of 
the  reformer — "  Where  has  the  increasing 
wealth  due  to  modern  progress  gone  ?  "  The 
answer,  given  in  tones  of  elegiac  irony  by 
persons  like  Mr.  Masterman,  is,  "  Most  of  it 
has  gone  to  increase  the  piled-up  aggregations 
of  the  superwealthy."  The  answer  shouted  by 
persons  like  Mr.  Snowden  is,  "All  of  it  is  going, 
just  as  all  of  it  has  ever  gone,  to  increase  the 


2i6  FALLACIES  OF  REFORMERS      [Book  IV. 

riches  of  those  who  were  enormously  rich 
already."  In  reality  if  "  the  enormously  rich  " 
and  the  "  superwealthy  "  mean  the  persons  with 
huge  yachts  and  the  wives  who  wear  a  fortune 
in  their  tiaras,  the  "  all  "  or  the  "  most "  of  the 
increment  which  is  asserted  to  have  gone  to 
these,  will  not  amount  to  so  much  as  one  thirty- 
third  part  of  it.  Even  if  we  include  in  this 
class  all  persons  whose  incomes  exceed  ,£5,000 
— a  sum  as  to  which  we  have  the  authority  of 
Mr.  Lloyd  George  for  saying  that  it  means 
"  comparative  poverty  "  instead  of  conspicuous 
wealth — the  "  rich  "  of  Mr.  Snowden's  dreams 
will,  instead  of  getting  all  of  the  increment, 
have  got  only  one  fifteenth;  whilst  if  we  reflect 
on  the  fact  emphasised  in  previous  chapters 
that  a  large  part  of  their  gains  is  imported  from 
foreign  countries  (as,  for  instance,  in  the  case  of 
American  Marconi  Telegraphs)  their  share  of 
the  increment  originating  in  the  United  King- 
dom will  certainly  not  be  more  than  four-and-a- 
half  per  cent,  of  it.  Of  the  remaining  1,050 
millions,  95  per  cent,  has  gone  to  persons  with 
incomes  not  exceeding  ^1,000;  and,  even  if  no 
allowance  be  made  for  income  imported  from 
abroad,  86  per  cent,  has  gone  to  persons  with 
incomes  not  exceeding  ^400. 

It  will  thus  be  evident  to  the  reader  that,  from 
whatever  point  of  view  we  regard  the  matter, 
the  current  doctrine  of  reformers  as  to  modern 
conditions  and  tendencies,  whether  that  doctrine 
be  taken  in  its  extremest  or  in  its  more  modified 
forms,  is  not  an  exaggeration  of  realities;  it  is 


Cbap.  II.]      ANALYSIS  OF  INCREMENT  217 

(as  has  been  said  already)  a  downright  and 
direct  inversion  of  them. 

But  the  actual  facts  of  the  situation  have  as 
yet  been  but  half  stated.  However  opposite 
to  truth  the  ideas  of  reformers  may  be  as  to 
the  manner  in  which  wealth,  as  it  continues  to 
increase,  distributes  itself,  the  fact  remains,  as 
the  foregoing  figures  show,  that  the  portion 
which  has  gone  to  the  richer  classes  is  consider- 
able. Thus  whereas  the  aggregate  of  incomes 
not  exceeding  ^160  a  year  has  in  absolute 
amount  increased  by  about  1,200  million  pounds, 
the  aggregate  of  home-produced  incomes  ex- 
ceeding ;£i6o  has  at  all  events  increased  by 
some  480  millions. 

Of  what  elements,  then,  let  us  ask,  is  this 
latter  increment  composed? 

About  ^40,000,000,  or  8  per  cent.,  is  the 
increased  rental  of  agricultural  lands  and  of 
building-sites.  Here  we  have  the  one  group 
of  incomes  which  has  failed  to  increase  in  a 
ratio  which  even  approaches  that  of  the  increase 
of  the  population. 

About  10  per  cent,  or  ,£48,000,000,*  is  the 
i.  This  estimate  is  based  partly  on  the  common  estimate 
of  the  professional  income,  viz.,  £60,000,000,  and  partly  on 
an  examination  of  the  assessments  under  Schedule  D,  re- 
lating to  the  year  1812,  and  issued  in  the  year  1816.  The 
total  profits  from  professions  and  trades  exceeding  £160  a 
year  amounted  to  no  more  than  £22,000,000  :  but  there  was  a 
total  of  about  £15,000,000,  consisting  of  incomes  between 
£160  and  £600,  which  (allowance  being  made  for  a  ten 
years  increase  in  the  national  wealth  since  1801)  will  allow 
us  to  estimate  the  professional  income  in  that  year  at 
about  £12,000,000. 


»i8  MANUFACTURED   GOODS        [Book  IV. 

increase  in  professional  incomes — an  increase 
which  appears  (for  we  cannot  here  speak 
exactly)  to  have  been  about  the  same  as  the 
increase  of  the  population. 

Of  the  remaining  82  per  cent,  of  the  incre- 
ment here  in  question — a  remainder  amounting 
to  about  ^392,000,000 — the  whole,  except  one- 
sixteenth,  namely  the  salaries  of  Government 
employees — is  derived  from  the  production 
and  commercial  distribution  of  material  things, 
whether  as  bought  by  those  who  enjoy  them,  or 
hired  by  them  for  temporary  use.  These  things 
are  broadly  divisible  into  the  structures  of 
private  dwelling-houses,  and  ordinary  merchant- 
able commodities,  including  use  of  the  means 
of  travel. 

The  increase  derived  from  the  production, 
the  selling  and  the  letting  of  such  material 
things,  amounts  to  nearly  £$ 70,000,000.  Of 
this  sum  about  ,£52,000,000  is  accounted  for 
by  the  increase  in  the  structure-rent  of  private 
dwellings.  This  increase,  owing  to  the  increased 
cost  of  building,  and  the  ampler  accommodation 
demanded,  is  somewhat  greater  than  the 
corresponding  increase  of  the  population;  but 
the  difference  is  comparatively  small.  The 
really  important  change,  which  colours  the 
whole  situation,  is  that  which  is  due  to  the 
increase  in  the  production  of  the  mass  of  manu- 
factured goods;  and  amounts  approximately  to 
£$  1 6,000,000. 

The  total  of  incomes  exceeding  ^160  a  year 
which  have  their  origin  in  the  production  and 


Chap.  II.]        PROFITS    AND    SALARIES  819 

distribution  of  these  has  increased  from  about 
;£2  8,000,000 T  in  the  year  1801  to  ^316,000,000 
in  the  year  1910.  In  other  words,  whereas  the 
population  has  increased  five  fold,  this  par- 
ticular group  of  incomes  has  increased  twelve 
fold;  whilst  it  still  remains  for  us  to  note  an 
increase  which  is  absolutely  smaller,  but  which 
is  in  its  own  way  by  no  means  less  remarkable. 
This  is  the  increase  in  the  aggregate  of  incomes 
exceeding  £160  which  goes  to  the  officials  of 
the  governmental  beaurocracy.  The  total  of 
the  corresponding  incomes  in  the  year  1812  was 
not  so  much  as  ^i,ooo,ooo.2  It  amounts  at  the 
present  time  to  about  ^24,000,000. 

And  now  reverting  to  the  increase  in  the 
income  from  the  production  and  distribution  of 
goods,  which  if  rent  of  houses  be  excluded,  is 
about  ^316,000,000,  let  us  note  one  further 
fact — that  this  sum  is  essentially  of  a  composite 
character.  It  comprises  two  distinct  (indeed 
we  may  say  of  two  contrasted)  elements,  the  one 
consisting  of  ordinary  profits  and  interest,  which 
go  to  the  heads  of  businesses  and  the  persons 
who  own  shares  in  them ;  and  the  other  consist- 
ing of  salaries  exceeding  ^"160  a  year,  which  go 
to  a  multitude  of  functionaries  whom  these  per- 
sons employ ;  and  out  of  a  total  business  increase 
of  nearly  ^320,000,000,  profits  and  dividends, 

i.  It  must  be  noted  that  these  figures  refer  solely  to 
Incomes  in  excess  of  £,160  a  year. 

t.  The  total  assessed  under  Schedule  E  in  the  year  1812 
was  not  as  much  as  ^6,000,000,  or  about  one-twenty-fourth 
part  of  corresponding  amount  to-day. 


«o  SALARIED    WORKERS  [Book  IV. 

in  round  figures,  come  to  about  £200,000,000, 
whilst  ;£  1 20,000,000  (or  over  one-third  of  the 
total)  goes  to  persons  who  are  in  reality  a 
superior  class  of  wage-earners. 

When  these  two  groups  are  taken  separately, 
the  increase  in  income  from  the  manufacture 
and  distribution  of  goods  presents  itself  in  a 
new  light.  If  the  profit-incomes  or  share- 
incomes  exceeding  ^160,  which  were  derived 
from  business  in  1801,  amounted  to  about 
^28,000,000,  the  total  will  by  this  time  have 
increased  about  sevenfold,  or  not  50  per  cent, 
faster  than  the  population;  but  the  salaried 
employees  earning  more  than  £160,  are  numeri- 
cally a  new  creation ;  and  from  what  has  been 
said  already  it  will  be  seen  that  the  same 
observation  applies  to  the  class  kindred  to 
them,  namely  to  the  officials  of  our  state  bureau- 
cracy. 

Of  these  two  salaried  classes  the  number 
to-day  is  about  650,000.  It  represents  a  popu- 
lation equal  to  about  half  that  of  England  in 
the  reign  of  George  II;  and  is  more  than  six 
times  as  great  as  the  entire  number  of  persons 
whose  incomes  exceeded  ,£160  in  the  year 
1 80 1.  The  number  of  these  last,  as  we  have 
seen  already,  was  at  that  time  about  100,000; 
and  had  such  persons  only  multiplied  in  the 
same  ratio  as  the  population,  their  number 
to-day  would  be  not  more  than  half  a  million. 
It  is,  however,  in  reality,  as  we  have  already 
seen  likewise,  nearly  three  times  as  great,  or 
about  1,400,000.  That  is  to  say,  the  absolute 


Chap.  II.]  THE  LOWER  MIDDLE  CLASSES  a« 

increase  exceeds  the  proportional  increase  by 
900,000;  and  of  this  absolute  increase  of  900,000 
persons,  72  per  cent,  consist  of  salaried  em- 
ployees of  business  houses  and  of  the  state. 
A  similar  phenomenon  discloses  itself  if  we 
turn  our  attention  to  the  classes  described  as 
"  the  lower  middle."  These  may  be  broadly 
taken  as  comprising  all  persons  having  incomes 
between  £80  and  ^160  a  year,  who  are  engaged 
otherwise  than  in  ordinary  manual  labour,  or 
commercial  or  domestic  service;  and  they  do 
not,  in  respect  of  the  kinds  of  work  performed 
by  them,  differ  greatly  from  the  salaried  classes 
whose  earnings  are  on  a  higher  scale.  The 
number  of  such  persons  in  the  year  1801,  as 
ascertainable  from  the  income-tax  returns,  was 
nearly,  though  not  quite,  100,000,  or  together 
with  their  families  about  250,000,  the  average 
income  per  earner  having  been  about  ^"90.  The 
number  of  persons  in  a  corresponding  position 
to-day  is  (as  was  shown  in  Book  II,  Chapter  III) 
about  2,300,000;  or  together  with  their  families 
certainly  not  less  than  5,000,000,  the  average 
income  per  earner  being  rather  more  than  ^"100. 
Thus  in  the  year  1801  the  upper  middle  class, 
with  incomes  rising  to  ,£1,000  a  year,  and  the 
lower  middle  class,  with  incomes  rising  from 
;£8o  to  ,£160,  represented,  together  with  their 
families,  750,000  persons.  To-day,  they  repre- 
sent twelve  millions.  They  form  to-day  about 
27  per  cent,  of  the  population,  whereas  at  the 
beginning  of  the  nineteenth  century  they  formed 
not  so  much  as  9  per  cent. 


222  MANUAL    WORKERS  [Book  IV. 

And  this  fact  has  a  converse  side  which  is  no 
less  important.  The  remainder  of  the  popula- 
tion in  the  year  1801,  which  may  roughly  be 
taken  to  correspond  to  the  manual  workers, 
whether  these  be  productive  or  distributive, 
numbered  more  than  8,000,000  out  of  a  total 
population  of  9,000,000.  They  formed,  that 
is  to  say,  about  92  per  cent,  of  the  whole. 
To-day,  out  of  a  total  population  of  45,000,000, 
they  number  about  33,000,000,  and  they  thus 
form  no  more  than  73  per  cent,  of  the  whole. 
The  classes  representing  economic  positions 
and  activities  other  than  those  of  the  ordinary 
manual  labourer  have  increased  in  the  ratio  of 
i  to  1 6.  The  classes  representing  ordinary 
manual  labour  have  increased  in  a  ratio  of 
barely  more  than  i  to  4. 

Now  to  those  who  are  inclined  to  believe  in 
the  general  theory  of  Marx  as  to  the  enrichment 
of  the  few  at  the  expense  of  the  labouring 
many,  it  may  seem  that  we  have  here  at  all 
events  a  modified  confirmation  of  it;  and  atten- 
tion shall  be  called  to  certain  farther  particulars 
by  which  such  persons  may  be  tempted  at  first 
sight  to  consider  that  their  position  is  confirmed. 
The  body  consisting  of  persons  other  than 
manual  labourers  has  already  been  divided  into 
those  respectively  supported  on  incomes 
exceeding  ,£5,000  a  year,  on  incomes  between 
,£1,000  and  £"5,000,  on  incomes  between  ,£160 
and  £  1,000,  and  on  incomes  between  £"80  and 
^£160;  and  the  aggregate  income  of  each  group 
has  been  given  in  respect  of  each  date  in 


€hap.  H.)         AVERAGE    OF    INCOMES  333 

tion.  It  now  remains  for  us  to  observe  that 
not  only  have  the  number  and  aggregate  income 
of  each  of  these  groups  increased,  but  the 
average  income  per  head  has  in  each  case 
increased  likewise,  the  increases  ranging  from 
10  to  20  per  cent.1  Any  platform  orator 
with  these  figures  before  him  might  plausibly 
adduce  them  as  proving  at  least  as  much  as 
this : — that  a  minority  consisting  of  less  than 
one-third  of  the  nation  was  eating  up  every 
increase  that  ought  to  have  gone  to  the 
majority.  We  have,  however,  only  to  turn  to 
the  income  of  the  majority  itself;  and  the 
following  fact  will  be  apparent.  It  is  precisely 
amongst  the  majority — amongst  the  mass  of 
manual  labourers — that  the  rate  of  increase  in 
the  average  income  per  earner  has  been  greatest. 
Let  us  consider  how  this  is. 

If  all  incomes  other  than  those  of  the  manual 
labourers  be  taken  together  as  a  whole,  it  will 
be  found  that,  though  for  each  sub-section  the 
average  income  has  increased,  the  general 
average  has  not  increased,  but  declined.  Such 
a  result  may  at  first  sight  seem  a  paradox;  but 
the  explanation  is  extremely  simple.  If  one 
man  has  ^40  a  year  and  another  £20,  the 
average  income  per  head  of  the  two  men  is  ^"30. 
If  there  are  two  men  with  incomes  of  ^42,  and 
eight  men  with  incomes  of  £22,  one  class  of 

i.  Thus  the  average  of  incomes  exceeding  £5,000  a  year 
has  risen  from  £10,000  to  £12,000.  The  average  of  middle- 
class  incomes  between  £80  and  £160  appear  to  have  risen 
by  about  10  per  cent. 


324  AVERAGE   OF    INCOMES         [Book  IV. 

income  will  have  increased  by  5  per  cent.,  the 
other  will  have  increased  by  10;  but  whereas  in 
the  first  case  we  had  two  men  with  an  average 
income  of  ^30,  in  the  second  we  have  10  men 
with  an  average  of  only  £26.  Each  class  of 
income  has  increased  both  in  average  amount 
and  number;  but  the  numerical  increase  of  the 
larger  incomes  has  been  small,  and  the  numerical 
increase  of  the  smaller  incomes  has  been  large. 
This  is  precisely  what  has  happened  in  the  case 
of  the  incomes  here  in  question.  Of  incomes  in 
excess  of  £160  a  year,  the  number  of  those  in 
excess  of  ^"1,000  has  not  increased  in  a  century 
by  as  much  as  70,000.  The  number  of  those 
ranging  from  £  i  ,000  down  to  £,  1 60  has  increased 
meanwhile  by  more  than  a  million  and  a  quarter. 
Hence  it  appears  that,  strange  as  some  readers 
may  think  it,  the  average  amount  of  incomes  in 
excess  of  ^160  was  as  much  as  ^600  in  the 
year  1801,  whereas  to-day  it  is  only  ^500, 
additions  from  abroad  included ;  whilst  if  these 
additions  be  excluded,  as  we  have  seen  in  an 
earlier  chapter,  the  average  does  not  exceed,  if 
it  indeed  reaches,  ,£400.  And  these  facts 
become  even  more  important  when  we  consider, 
with  regard  to  the  increase  of  the  non-labouring 
classes,  how  large  a  part  of  it  is  contributed  by 
those  called  "  the  Lower  Middle." 

For,  in  proportion  as  the  entire  Middle  Class 
has  increased  in  a  ratio  greater  than  that  of  the 
increase  of  the  mass  of  the  population,  certain 
persons  who  would,  had  all  classes  increased 
equally,  have  to-day  been  included  in  the  class 


Chap.  II.]  INCOMES  ABOVE  AND  BELOW  ^1,000    225 

of  manual  labourers,  will  have  passed  over  into 
a  class  the  earnings  of  which  are  larger,  and 
whose  functions,  though  not  less  valuable,  are 
yet  of  a  different  character.  It  is  necessary  to 
grasp  this  fact  if  we  wish  to  form  any  clear 
picture  of  what,  during  modern  times,  has  really 
happened  with  regard  to  the  distribution  of 
wealth;  and  to  the  outlining  of  such  a  picture 
we  are  now  in  a  position  to  proceed. 

Let  us  begin,  then,  with  a  few  words  as  to 
incomes  in  excess  of  ^1,000.  The  number  of 
these  in  the  year  1801  was,  as  we  have  seen, 
not  more  than  11,000.  In  the  year  1910  it  was 
approximately  75,000;  but  this  merely  numerical 
increase  is  too  small  to  be  important;  and 
though  this  aggregate  income  has  risen  in  the 
ratio  of  i  to  8^,  the  income  of  the  nation  has 
risen  in  the  ratio  of  i  to  12.  Thus  relatively 
to  the  whole,  the  income  of  this  group  has 
declined.  We  will,  therefore,  confine  our  atten- 
tion to  the  mass  of  incomes  remaining. 

The  aggregate  of  incomes  not  exceeding 
;£i,ooo  in  the  year  1801  was  ,£150,000,000. 
In  the  year  1910  it  was  £  1,7 60,000,000.  The 
former  sum  was  divided  between  nearly 
9,000,000  persons,  of  whom  barely  three- 
quarters  of  a  million  belonged  to  the  middle 
class,  and  eight  millions  and  a  quarter  to 
the  labour  class.  The  latter  sum  was  divided 
between  nearly  45,000,000  persons,  of  whom 
nearly  12,000,000  belonged  to  the  middle 
class,  and  33,000,000  to  the  labour  class; 
whereas  if  both  these  parts  had  increased  in  the 


226          INCOMES  OF  MANUAL  WORKERS  [Book  IV. 

same  ratio  as  the  whole,  the  labour  class  would 
have  numbered  more  than  41,000,000,  and  the 
middle  class  would  have  fallen  appreciably 
short  of  4,000,000.  This  means  that  there  are 
in  the  United  Kingdom  to-day  more  than 
8,000,000  persons  who,  had  no  changes  resulted 
from  the  modern  capitalistic  system  other  than 
an  increase  of  wealth  proportionate  to  the 
increase  of  the  population,  would  have  been 
members  of  the  class  that  lives  by  manual 
labour,  but  who  have  in  reality,  through  the 
workings  of  that  system,  been  raised  out  of  the 
ranks  of  manual  labour  altogether,  thus  practi- 
cally constituting  a  labour  class  of  a  new  kind. 
And  now  let  us  turn  to  the  mass  of  the 
manual  labourers  themselves.  Just  as  rela- 
tively to  the  number  of  the  population  as  a 
whole  the  number  of  workers  of  other  kinds  has 
increased,  so,  in  the  same  relative  sense,  the 
number  of  the  labourers  has  decreased.  But 
between  these  two  bodies  this  is  not  the  only 
contrast.  The  average  income  per  earner  or 
per  head  in  the  case  of  both  bodies  has 
increased;  but  in  the  case  of  the  body  which 
has  relatively  declined  in  number — namely 
the  labourers — the  increase  in  average  income 
has  beyond  all  comparison  been  greatest. 
Middle  class  workers  of  various  grades,  who 
a  hundred  years  ago  were  earning  ^80,  ^200, 
^300  or  ;£6oo,  would  to-day  be  earning 
from  £100  to  ;£66o.  Such  incomes  will 
have  increased  by  10,  or  in  some  cases  by  20 


Chap.  II.]  INCOMES  OF  MANUAL  WORKERS          aaf 

per  cent,  but  how  do  matters  stand  with  regard 
to  the  manual  labourers?  Had  the  entire 
income  of  the  country  in  the  year  1801  been 
divided  equally  amongst  all,  the  share  per  head 
of  the  population  would  have  only  been  £20. 
The  share  per  worker  would  have  been  not  more 
than  ,£45.  The  actual  average  for  all  manual 
labourers,  from  the  highest  grade  to  the  lowest, 
was,  as  may  be  seen  from  the  figures  quoted 
in  previous  chapters,  not  more  than  ,£29. l 
The  corresponding  average  for  to-day — the 
average  independent  of  skill,  age  and  sex — is, 
as  has  likewise  been  shown  in  a  previous  chapter, 
more  than  £60.  Thus,  whilst  the  remuneration 
of  work  other  than  manual  has  risen  on  the 
whole  (we  may  say  roughly)  by  15  per  cent.,  the 
remuneration  of  manual  work  has  risen  by  no 
less  than  120  per  cent. 

In  other  words,  if  we  exclude  only  those 
employers,  heads  of  enterprises,  administrators, 
and  owners  of  property,  whose  incomes  exceed 
;£iooo — the  total  of  these  incomes,  in  so  far  as 
it  is  of  home  origin,  being  not  more  than  9  per 
cent,  of  the  entire  income  of  the  nation — and  if 
we  take  all  other  kinds  of  workers  together,  scien- 
tific, administrative,  clerical,  manual  and  educa- 
tional, by  whom  the  wealth  of  the  country  is 
produced,  and  the  workers  prepared  for  the 
production  of  it,  the  history  of  the  production 

i.  The  middle  class  workers  being  deducted,  there  was 
in  1801  an  income  of  ^110,000,000  on  a  maximum  to  be 
divided  amongst  a  population  of  more  than  8,000,000 
persons,  of  whom  about  3,800,000  were  workers. 


2x8  SUMMARY  [Book  IV 

and  the  distribution  of  wealth  from  the  begin- 
ning of  the  nineteenth  century  up  to  the  present 
time,  may  be  broadly  summed  up  as  follows. 

After  all  allowance  has  been  made  for  the 
increase  of  the  population,  the  financial  incre- 
ment resulting  from  the  progress  of  more  than 
a  century  is  an  additional  income  amounting  to 
i,  1 20  millions,  of  which  about  one-eleventh 
goes  to  persons  having  more  than  ^1,000  a 
year.  The  total  left  for  distribution  amongst 
the  rest  of  the  nation  amounts  thus  to  1,020 
millions;  and  if  (examining  somewhat  more 
minutely  the  specific  evidence  at  our  disposal1) 
we  add  certain  farther  details  to  the  analysis 
already  given,  the  result  may  be  summarised  in 
the  following  amended  statement. 

Of  the  total  sum,  amounting  to  1,020  million 
pounds,  by  which,  as  compared  with  conditions 
in  1 80 1,  the  increase  in  the  income  of  the 
labouring  and  middle  classes  exceeds  the 
increase  in  their  number, 

13  per  cent,  has  gone  in  increasing  the  num- 
ber of  incomes  between  ,£400  a  year  and 
,£1,000,  and  slightly  raising  at  the  same 
time  their  average  amount,  which  is  now 
about  ^630. 

i.  In  the  returns  for  1801,  incomes  between  ,£160  and 
.£1,000  are  divided  into  those  exceeding  and  not  exceeding 
£500.  The  numbers  exceeding  and  not  exceeding  ^4°° 
have,  for  the  purposes  of  the  tabular  statement  in  the  text, 
been  arrived  at  by  reference  to  current  assessments, 
Schedule  E,  which  may  be  taken  as  indicating  the  propor- 
tion of  incomes  between  ^400  and  ^500  to  the  rest,  in  1801. 


Chap.  II.]  LABOURERS  229 

17  per  cent,  has  gone  in  increasing  the  num- 
ber of  incomes  between  ;£i6o  and  ^400, 
and  slightly  raising  at  the  same  time 
their  average  amount,  which  is  now  about 
^260. 

20  per  cent,  has  gone  in  increasing  the  num- 
ber of  incomes  between  ^90  and  ,£160, 
not  earned  by  wage-paid  manual  labour, 
and  in  slightly  raising  at  the  same  time 
their  average  amount,  which  is  now  about 
;£ioo. 

50  per  cent,  has  gone  to  manual  labourers, 
not  in  increasing  their  number  (for  this, 
relatively  to  the  population  has  declined 
by  20  per  cent.)  but  in  more  than  doub- 
ling the  average  per  head  earned  by 
them,  this  having  been  raised  in  the  ratio 
of  100  to  220. 

With  regard  to  the  labourers,  certain  special 
observations  must  be  added.  Had  their  number 
increased  in  the  same  ratio  as  the  population, 
and  not  been  diminished  by  the  elevation  of  a 
large  proportion  of  them  to  the  ranks  of  what 
is  really  a  labour  class  of  a  new  kind,  they 
would  have  appropriated  of  the  increment 
in  question,  not  50  per  cent,  but  70;  but  the 
fact  that  they  alone  have,  relatively  to  their 
number,  more  than  doubled  their  earnings, 
whilst  no  middle  class  incomes  have  even 
approached  such  an  increase,  must  be  taken  in 
connection  with  a  farther  fact,  which  has  already 


230  INCOMES  OF  LABOURERS        [Book  IV. 

been  discussed  at  length.  To  say  with  regard 
to  the  labourers  that  the  average  income  per 
earner  (irrespective  of  skill,  age,  and  sex)  is 
now  over  ,£60  as  compared  with  £29  in  the  year 
1 80 1  is  not  in  itself  sufficient  to  indicate  what 
has  really  happened.  Unlike  all  middle  class 
incomes,  each  of  which  has  a  definite  lower 
limit,  the  earnings  of  labour  may  in  many  cases 
sink  to  an  indeterminate  minimum  which,  if  not 
supplemented  by  poor-relief,  would  be  insuffi- 
cient to  support  life.  It  has,  however,  been 
pointed  out  that,  whereas  in  the  year  1801  only 
10  per  cent,  of  all  incomes  not  exceeding  ^160 
a  year  were  above  what  reformers  to-day  quote 
as  the  poverty  limit,  only  20  per  cent.,  if  so 
much,  now  fall  below  it.  It  is  therefore  obvious 
that  the  increase  in  the  remuneration  of  labour 
has  affected  all  groups  except  one,  which  is  at 
once  small  and  exceptional.  This  group, 
precisely  because  it  is  exceptional,  will  presently 
be  considered  by  itself.  The  groups  of  persons 
at  the  other  end  of  the  scale,  whose  incomes 
exceed  ^"1,000,  ,£5,000  or  ,£20,000  (relatively 
insignificant  though  their  aggregate  income  be), 
will  for  the  same  reason  be  considered  separ- 
ately also. 

Meanwhile,  confining  ourselves  to  the  great 
body  of  the  population,  who  represent  at  least 
90  per  cent,  of  the  home-produced  income  of 
the  country,  we  may  again  observe  with  regard 
to  them  that  86  per  cent,  of  it  has  gone  in 
doubling  the  income  of  the  majority  of  the 
labouring  classes,  and  in  multiplying  the 


Chap.  II.]  A  FUNDAMENTAL  MISCONCEPTION      331 

incomes  of  middle  class  workers,  none  of 
which  exceed  ^400  a  year;  whilst  14  per 
cent,  has  gone  to  a  group  comparatively 
small,  none  of  whose  members  have  more  than 
j£i,ooo  a  year,  their  average  income  being  not 
so  much  as  ^650. 

Everything,  in  short,  has  happened  which, 
according  to  the  reformers,  has  not  happened. 
And  now  it  must  be  observed  that  this  funda- 
mental misconception  on  their  part  does  not 
merely  affect  them  and  their  followers  by 
influencing  their  general  judgment  of  things, 
and  their  general  temper  and  attitude  of  mind 
towards  them.  It  vitiates  their  treatment  and 
conception  of  each  single  question  or  problem 
on  which,  as  the  subject-matter  of  reform, 
public  attention  from  time  to  time  is  concen- 
trated. The  chief  of  these  questions  or  prob- 
lems shall  be  reviewed  in  the  next  two  chapters; 
and  some  of  the  ludicrous  and  contradictory 
errors  of  judgment  shall  be  signalised,  which 
reformers,  whether  radical  or  socialist,  are 
accustomed  to  bring  to  the  solution  of  them. 


CHAPTER    III. 

A  DISTINGUISHED  American  writer,  in  his  annals 
of  "A  Tramp  Abroad,"  describes  how  a  traveller 
on  arriving  at  a  mountain  hotel  in  Switzerland, 
slept  so  long  that,  intending  to  see  the  sunrise, 
he  found  himself  watching  what  he  subsequently 
discovered  to  be  the  sunset.  This  misconcep- 
tion, among  other  effects  on  his  conduct,  caused 
him  to  sally  from  his  bedroom  with  nothing  on 
but  a  dressing-gown,  and  encounter  a  congre- 
gation of  guests  elaborately  costumed  for 
dinner.  The  profound  misconception  of  social 
actualities  as  a  whole,  which  is  distinctive  of 
the  reformers  of  to-day,  affects  in  a  similar 
manner  their  judgment  in  respect  of  the  various 
particular  questions  with  which  all  politics,  in 
so  far  as  they  are  practical,  are  concerned. 

The  most  striking  illustration  of  this  is  the 
case,  described  already  of  Marx  and  Henry 
George.  Both  started  with  the  same  general 
theory  that  one  class  was  growing  so  inordin- 
ately rich  that  every  other  class  was  the  victim 
of  increasing  poverty.  Both  maintained  that 
this  movement  was  exemplified  in  the  British 
Islands  on  a  scale  more  appalling  than  in  any 
other  country  of  the  world :  and  each  realised 
that  if  this  theory  was  to  be  invested  with  any 
practical  meaning,  the  particular  class  of  Britons 
which  was  seizing  on  everything  must  be  iden- 

333 


Chap.  III.]  THEORIES  OF  MARX  &  GEORGE          233 

tified,  and  some  explanation  given  of  the  why 
and  how  of  its  depredations.  Marx  identified 
this  class  with  the  great  modern  manufacturers, 
George  with  the  great  landlords.  Thus  all 
reform  for  Marx  reduced  itself  to  an  industrial 
question;  for  George  all  reform  reduced  itself 
to  a  rent-question,  or  a  land-question.  Each 
of  these  questions  relates  to  a  multitude  of 
detailed  facts;  and  we  have  seen  already  to 
what  an  astonishing  extent  the  general  theory 
with  which  both  reformers  started  reproduced 
its  errors,  when  applied  by  each  to  the  group  of 
particular  facts  selected  by  him. 

The  same  mental  process  is  in  operation 
amongst  reformers  still.  But  to-day  each  of 
the  two  original  questions  is  broken  up  into 
several,  according  to  the  varieties  of  intelli- 
gence, education  and  temper,  which  reformers 
have,  since  the  days  of  George  and  Marx, 
brought  to  bear  on  the  teachings  of  those  who 
are  still  their  masters.  Thus  the  land-question 
resolves  itself  into  one  thing  for  the  single- 
taxer,  into  another  for  the  socialist,  and  again 
into  another  for  the  radical ;  whilst  the  industrial 
question,  with  which  socialists  are  mainly  pre- 
occupied, resolves  itself,  according  as  it  is 
approached  by  socialist  reformers  or  radical, 
into  "  questions  "  which  point  to  the  extinction 
of  the  private  capitalist  altogether,  or  to 
"  questions  "  which  imply  his  perpetuation  by 
enabling  his  opponents  to  endure  him. 

In  the  present  and  the  following  chapters 
certain  of  the  most  important  of  these  separate 


a$4  "  SINGLE   TAKERS  "  [Book  IV. 

"  questions  "  shall  be  dealt  with  one  by  one ; 
and  in  each  case  it  shall  be  shown  how  the 
general  theory  which  all  the  reformers  adopt 
as  the  explanation  of  all  social  evils,  vitiates 
their  estimates  of  the  actualities  with  which  they 
propose  to  deal.  These  "  questions  "  are  as 
follows : — 

The  land-question  as  understood  by  the 
single-taxers. 

The  land-question  as  understood  by  the  mass 
of  radicals. 

The  land-question  as  it  appears  under  the 
form  of  the  "  agricultural  question." 

The  industrial  question  as  a  question  of 
wages. 

The  industrial  question  as  a  question  of 
profits. 

In  the  present  chapter  we  will  deal  with  the 
questions  that  relate  to  land. 

With  regard  to  the  single-taxers,  it  is  needless 
to  say  more  than  a  word  or  two.  Like  dunces 
put  in  a  corner,  they  form  a  class  by  themselves, 
scouted  by  all  the  others.  The  conservative 
rejects  them,  because  the  essence  of  their 
programme  is  robbery.  The  socialist  rejects 
them  because  their  robbery  would  not  go  far 
enough.  The  radical  rejects  them  for  another 
reason,  which  he  shares  with  the  conservative, 
and  with  most  socialists  also,  but  which,  in  the 
ca£*  of  the  radical  is  deserving  of  special  notice, 
and  which  will  be  stated  presently.  The  single- 
taxers,  who  would  confiscate  all  land-rent  under 
the  guise  of  a  tax  which  should  supersede  all 


Chap.  ITT  1          THE    LAND    QUESTION  235 

others,  represent  in  its  childish  integrity  the 
fundamental  doctrine  of  George,  that  the  rent 
of  crude  land,  in  every  progressive  country, 
eats  up  most  of  the  wealth  created  by  capital, 
as  well  as  that  created  by  labour,  and  that  it  is 
making  its  largest  meal  in  Great  Britain  and 
Ireland.  They  accordingly  maintain,  as  the 
basis  of  their  practical  proposals,  that  no  matter 
how  many  millions  or  hundreds  of  millions  of 
pounds  the  public  expenditure  of  this  country 
amounts,  or  may  one  day  amount  to,  land-rent 
does  and  will  amount  to  a  sum  still  greater. 
But,  plausible  as  their  scheme  may  sound,  the 
radicals  of  to-day  reject  it.  And  why?  The 
reason  why  they  reject  it  is  this.  They  realise 
that  the  one  proposition  as  to  fact  on  which  the 
single-taxers  take  their  stand  is  a  piece  of 
grotesque  nonsense,  and  that  any  policy  based 
on  it  would  end  in  ruin  and  ridicule. 

Let  us  now,  in  the  searchlight  of  exceedingly 
recent  history,  consider  the  "  land-question  "  as 
understood  by  the  radicals  themselves.  Having 
rejected  one  fiction  with  regard  to  the  rent  of 
land,  they  have  at  once  adopted  another,  which 
in  some  ways  is  even  more  preposterous.  Their 
reasoning  has  been  virtually  as  follows.  '  The 
landlords  have  not  yet  succeeded  in  robbing 
the  nation  to  the  extent,  or  nearly  to  the  extent, 
which  certain  persons  suppose;  but,  since  all 
poverty  is  due  to  the  increasing  accumulations 
of  the  superwealthy,  the  landlords  must  be 
obviously  amongst  the  first  offenders  somehow. 
How,  then,  in  their  case  is  the  trick  of  accumu- 


336  RENT    OF    LAND  [Book  IV. 

lation  done?"  Armed  with  the  major  premiss 
that  the  trick  is  being  brought  off  somehow,  tne 
radicals  were  quick  in  agreeing  as  to  what  the 
operation  was.  "  It  may  be  true,"  they  said  in 
effect,  "  that  the  rent  of  land  to-day  is  not  as 
a  whole  greater  than  the  income  from  other 
securities;  but  in  one  respect  stands  alone.  It 
stands  alone  in  the  fact  that,  unlike  income 
from  shares  in  any  kind  of  commercial  enter- 
prise, it  exhibits  an  automatic  increase — a 
portent  unknown  to  stockbrokers;  and  here,  in 
this  'unearned  increment/  and  not  in  land- 
rent  as  such,  we  identify  those  thefts  on  which 
the  landlords  thrive,  and  which  leave  the  homes 
of  the  people  defenceless  against  '  the  wolves 
of  hunger.'  It  is  useless  to  object,"  the  argu- 
ment thus  continued,  "  that  the  land-rent  of  the 
country  even  now  is  not  more  than  so  much. 
What  the  people  must  be  made  to  realise  is  its 
daily  and  hourly  increase,  and  the  fact  that 
every  year  this  increase  is  itself  increasing. 
Let  this  be  compared  with  the  increases  of 
income  from  other  sources,  and  it  leaves  them 
all  behind.  Does  anybody  doubt  this?  We 
can  open  his  eyes  by  instances." 

The  train  of  powder  having  been  laid,  the 
match  was  forthwith  applied  to  it.  From 
radical  platforms  everywhere  cases  were  cited 
(or  let  off,  like  school-boys'  crackers)  of  diminu- 
tive plots  of  land,  which  only  yesterday  were 
let  for  £$  an  acre,  and  had  just  been  re-leased 
for  ^300,  or  had  been  bought  by  the  father  of 
some  noble  duke  for  ,£5,000,  and  had  just  been 


Chap.  III.]          THE   ACTUAL   FACTS  »3J5 

resold  by  the  son  for  something  like  ^"50,000; 
and  each  exhibition  of  instances  was  wound  up 
with  the  moral  that  "  this  sort  of  thing  is  in 
progress  all  over  the  country."  Such  argu- 
ments, as  emanating  from  the  leaders  of  radical 
opinion,  are  remarkable ;  but  what  is  still  more 
remarkable  is  the  instant  and  eager  acceptance 
of  them  by  the  whole  radical  public.  New 
instances  of  the  sensational  gains  of  landlords 
crowded  the  columns  of  the  ministerial  journals; 
and  the  image  of  the  "  unearned  increment " 
grew  to  such  vast  proportions  that  multitudes 
saw  in  a  tax  of  10  per  cent,  on  it  the  promise 
of  pounds  of  salmon  on  the  table  of  the  poorest 
worker,  and  the  rarest  of  refreshing  fruits  from 
thousands  of  miles  of  hot-houses. 

And  meanwhile  what  were  the  actual  facts  of 
the  situation  ?  The  radicals  professed  to  arrive 
at  these  by  an  examination  of  specific  instances, 
to  each  of  which  they  drew  attention  as  being 
at  once  startling  and  representative.  These 
instances  may  have  been  startling,  and  a  large 
number  of  them  may  have  been  true ;  but  what 
the  radicals  omitted  to  detect,  or  to  admit,  was, 
that  each  was  only  startling  because,  instead  of 
being  representative,  it  was  exceptional.  The 
radicals  might  just  as  reasonably  pick  out  five 
famous  artists,  each  of  whom  gets  for  a  picture 
ten  hundred  pounds  to-day,  whereas  not  many 
years  ago  he  was  getting  no  more  than  ten ;  and 
then  invite  us  to  conclude  that  the  earnings  of 
artists  as  a  whole — good,  bad  and  indifferent — 
are  a  hundred  times  greater  to-day  than  in 


*38  TOTAL    RENTAL  [Book  IV. 

the  reign  of  the  late  King  Edward.  The 
actual  facts  can  be  ascertained  by  a  very  simple 
method.  Year  by  year  the  Department  of 
which  the  Chancellor  of  the  Exchequer  is  the 
head,  issues  a  statement  of  the  rent  derived 
both  from  land  and  buildings;  the  gross  incre- 
ment in  respect  of  both  these  sums  is  for  each 
year  ascertainable  by  the  simplest  of  arithmeti- 
cal processes ;  and,  if  we  concede,  in  accordance 
with  the  common  computation,  that  the  ground- 
rent  of  a  building,  on  an  average,  is  as  much  as 
one  fifth  of  the  gross  rent,  we  can  determine 
with  an  accuracy  sufficient  for  all  general  pur- 
poses, what  year  by  year  has  been  the  increase 
in  the  rent  of  land  itself.  We  can  also,  by 
reference  to  similar  official  records,  compare  the 
increase  in  land-rent  with  the  contemporaneous 
increase  in  incomes  from  other  sources.  Let 
us  then  see  what,  according  to  the  Commis- 
sioners of  Inland  Revenue,  has  actually  taken 
place  in  the  course  of  the  last  fifteen  years.  In 
each  case  we  will  content  ourselves  with  the 
gross  amounts  as  given,  which,  though  greater 
than  the  true  totals  will  be  all  that  we  require 
for  a  comparison. 

In  the  year  1895  tne  gross  agricultural  rental 
of  the  United  Kingdom  (over-assessments  and 
outgoing's  included)  was  ^55,000,000;  the 
ground-rental  (urban  and  suburban)  was 
^3 1 ,000,000 ;  the  rental  as  a  whole  being- 
^86,000,000.  The  corresponding-  figures  in 
the  year  1910  were,  agricultural  rental. 
^"52,000,000;  ground-rental,  ^44,000,000;  th:- 


Chap.  III.]     RENT  OF  LAND  AND  INCOMES         259 

rental  as  a  whole  being  £96,000,000.  Let  us 
now  compare  the  rent  of  land  with  incomes  from 
two  other  sources  only — the  rent  of  buildings 
as  distinct  from  the  ground  they  stand  on,  and 
interest  derived  from  shares  in  foreign  railways 
and  loans  to  foreign  governments.  In  the  year 
1895,  the  building-rental  was  £  12 3, 000,000; 
the  income  derived  from  foreign  loans  and 
railways  was  ^54,000,000;  the  total  of  the  two 
revenues  being  ^17  7, 000,000.  In  the  year 
1910  the  corresponding  figures  were,  building- 
rental  ^178,000,000;  interest  from  foreign 
railways  and  foreign  government  loans, 
;£  1 01,000,000;  the  total  of  the  two  revenues 
being  ^279,000,000.  It  will  thus  be  seen  that 
whilst  incomes  other  than  land-rent  have 
increased,  during  the  period  in  question,  by 
more  than  ,£100,000,000,  land-rent  has  been 
so  untrue  to  its  reputation  that  it  has  managed 
to  increase  by  one  tenth  of  that  total  only.  But 
not  only  is  its  increase,  compared  with  that  of 
the  other  incomes  from  property,  negligible  in 
absolute  amount.  This  amount,  small  as  it  is, 
has  for  some  time  past,  been  annually  growing 
less  and  less.  The  agricultural  rental  has  not 
increased  at  all.  It  has  on  the  contrary  dwin- 
dled at  an  average  annual  rate  of  ,£400,000. 
The  only  increase  has  been  an  increase  in  the 
total  of  urban  ground-rents;  and  this  on  a 
yearly  average  has  amounted  approximately  to 
,£870,000.  If,  however,  the  fifteen  years  we 
are  dealing  with  be  divided  into  three  quin- 
quenniums,  we  shall  find  that  between  the  years 


340  UNEARNED   INCREMENT       [Book  IV. 

1895  and  1900  the  annual  increase  averaged 
about  £S 50,000,  that  between  the  years  1900 
and  1905  it  rose,  nominally  at  all  events,  to 
more  than  ^"900,000  j1  and  that  between  the 
years  1905  and  1910  it  was  not  more  than 
;£6oo,ooo.2  Finally,  if  we  compare  these 
increases  with  the  increase  of  the  national 
income  as  a  whole,  the  largest  of  them  as  well 
as  the  smallest  represent  a  relative  decrease. 
Thus,  to  sum  the  matter  up,  the  "  unearned 
increment "  of  land-rent  not  only  possesses 
none  of  the  qualities  which  the  radical  imagina- 
tion ascribes  to  it,  but  is  remarkable  for  others 
of  a  kind  precisely  opposite.  It  is  a  signal 
illustration  (if  we  look  at  it  from  a  speculative 
standpoint)  of  what  economists  call  the  law  of 
"  diminishing  returns  " ;  and  what  is  far  more 
important  for  all  practical  purposes,  its  absolute 
amount,  as  compared  with  the  wealth  of  the 
nation,  is  insignificant.  The  reformers  of 
to-day  who  announced  that,  by  placing  a  special 
tax  on  it,  they  were  taking  some  seven-leagued 
step  towards  the  abolition  of  poverty,  are  like 

1.  This  high  average  for  the  years  1900-1905  is  mainly 
due  to  overbuilding  in  the  year  1903.      The  nominal  in- 
crease in  house-and-site  values  thus  caused,  was  double 
the  average ;  but,  as  appears  from  the  Deductions  (Schedule 
A  of  the  Income-Tax  Returns),  there  resulted  a  greater 
increase  in  the  amount  deducted  in  respect  of  unoccupied 
premises 

2.  During  this  last  quinquennium  there  has  been  a  con- 
tinual decline  from  the  higher  level  of  previous  years  down 

to  about  ^300,000. 


Chap.  III.]   "  THE  AGRICULTURAL  PROBLEM  "   241 

a  sportsman  of  the  type  of  Tartarin,  who  should 
organise  a  vast  expedition  against  a  supposed 
man-eating  tiger,  and  at  the  end  of  the  day  come 
back  with  a  dormouse.  So  grotesque  a  mis- 
conception of  the  actualities  of  this  particular 
question  could  hardly  have  arisen  in  the  minds 
of  the  radical  leaders  themselves,  and  would 
certainly  have  been  never  accepted  by  multi- 
tudes with  acclamations  of  unhesitating  belief, 
had  it  not  been  a  part  of,  or  a  deduction  from, 
that  wider  misconception  of  the  general  trend 
of  affairs,  which  has  in  the  preceding  pages 
been  the  main  subject  of  our  enquiry. 

The  treatment  of  the  "  land-question,"  under 
the  form  of  "  the  Agricultural  Problem,"  by 
reformers  of  all  kinds  (who  in  this  connection 
comprise  certain  conservatives)  is  in  some 
respects  yet  more  interesting  as  an  illustration 
of  similar  results  arising  from  the  same  cause. 
It  is  more  interesting  because,  in  the  way  of 
actual  facts,  there  is  more  for  the  reformer  to 
go  upon.  With  regard  to  agriculture  in  this 
country,  the  following  facts  are  admitted  by  all 
parties : — 

In  the  first  place  it  is  politically  desirable  that 
the  maximum  amount  of  food  should  be  pro- 
duced within  our  own  borders;  in  the  second 
place,  for  reasons  other  than  those  of  insular 
self-support,  a  rural  population  is  an  important 
national  asset ;  in  the  third  place,  the  amount  of 
bread-stuffs  produced  in  the  United  Kingdom 
has,  throughout  the  lifetime  of  the  present 
generation,  been  declining;  and  lastly,  the 


443  MR.  MASTERMAN'S  FALLACIES  [Book  IV. 

number  of  persons  engaged  in  the  business  of 
agriculture  has,  throughout  the  same  period, 
been  steadily  declining  also.  All  these  points 
are  deserving  of  serious  consideration;  but  the 
moment  they  are  interpreted  in  the  light  of  the 
current  theory  of  reformers,  they  are  so  dis- 
guised, perverted  or  inverted,  that  no  sane 
judgement  with  regard  to  them  is,  so  long  as 
they  are  presented  in  such  forms,  possible. 

Let  us  see  how  this  feat  of  perversion  is 
accomplished  by  Mr.  Masterman.  In  his  book, 
'  The  Condition  of  England,"  he  professes  to 
give,  for  the  guidance  of  the  conscientious 
radical,  a  survey  of  English  agriculture,  and 
what  he  calls  "  the  life  of  the  countryside  "  from 
the  beginning  of  the  nineteenth  century  up  to 
the  present  time.  According  to  him  in  the  days 
of  our  great  grandfathers,  when  modern  super- 
wealth  was  as  yet  in  the  germ  only,  English 
agriculture  was  in  a  state  of  ideal  prosperity; 
the  English  peasantry  were  the  backbone  of  the 
population;  the  individual  peasant  or  labourer 
was  a  comparatively  free  man,  and,  though  not 
without  its  hardships,  "  his  lot  was  no  ignoble 
one."  But  now  in  the  course  of  little  more 
than  a  hundred  years  every  one  of  these  features 
has  undergone  a  disastrous  change.  The 
villages,  once  the  centre  of  England's  life,  have 
been  depopulated.  Out  of  every  ten  village 
families  nine  have  disappeared  for  ever.  The 
few  men  who  are  left,  although  they  have  now 
got  votes,  have  lost  that  sense  of  independence, 
which  was,  when  they  were  voteless,  their  very 


Chap.  III.]        SLAVES  OF  A  THEORY  *43 

remarkable  characteristic.  To-day,  says  Mr. 
Masterman,  they  "  are  still  as  slaves  before  their 
lords  " ;  they  are  moreover  by  this  time  so  sunk 
in  poverty  that  "  the  wonder  of  the  case  is  not 
that  so  many  go;  the  wonder  is  that  any 
remain";  whilst,  to  crown  the  miserable  story, 
the  business  of  agriculture  itself  (if  not  exactly 
dead)  is  dying. 

Mr.  Masterman's  statement,  if  it  does  not 
represent  facts,  is  an  excellent  representation 
of  the  representations  of  them  made  by  modern 
reformers.  Plutarch  was  said  by  a  critic  to  be 
so  much  the  slave  of  style  that,  if  it  had  been 
necessary  for  the  literary  perfection  of  a 
sentence,  he  would  have  made  Caesar  kill 
Brutus  instead  of  Brutus  killing  Caesar.  The 
reformers  in  the  same  way  are  the  slaves  of 
their  general  theory,  which  constrains  them  so 
to  represent  the  history  of  British  agriculture 
that  it  may  form  an  indictment  against  the 
present  system  of  landowning,  because  that 
system  is  associated  with  a  certain  class  of 
landowners,  to  whose  avenues  and  great  houses, 
to  whose  pheasants,  to  whose  foxes,  and  to 
whose  deer,  and  indeed  to  whose  vermin 
generally,  the  life  of  the  agricultural  worker 
and  the  powers  of  the  soil  have  been  immolated. 

Now  without  discussing  how  far  the  present 
system  of  landowning  may  be  responsible  for 
the  main  facts  of  our  modern  agricultural 
history,  let  us  take  these  facts  as  Mr.  Master- 
man and  his  friends  represent  them,  and 


144  AGRICULTURE  [Book  IV. 

compare    them   with   the   corresponding    facts 
which  are  attested  by  statistical  evidence. 

The  primary  propositions  of  Mr.  Mastennan 
and  his  friends  (which  a  good  many  conserva- 
tives have  been  induced  to  accept)  are  these  : — 

(1)  Agriculture,    regarded    as    a   productive 
business,  has  been  declining  for  more  than  a 
hundred  years. 

(2)  The    number    of    persons    engaged    in 
agriculture  has  been  declining  for  more  than  a 
hundred  years. 

(3)  The  wages  of  the  agricultural  labourer 
have  been  declining  for  more  than  a  hundred 
years : — all    these    results    being    due    to   the 
general  fact  that  this  country  is  a  country  of 
"  avenues  "  leading  up  to  the  houses  of  the 
"  superwealthy." 

The  first  and  the  third  of  these  propositions 
are  the  exact  reverse  of  the  truth.  The  second 
has  an  element  of  truth  in  it,  but  omits,  obscures, 
shuffles  out  of  sight,  buries,  the  one  part  which 
alone  can  render  the  whole  intelligible. 

With  regard  to  agriculture  considered  as  a 
productive  business,  its  prosperity,  like  that  of 
any  other  business  whatsoever,  must,  as  Mr. 
Masterman  and  all  other  reformers  will  admit, 
be  measurable  by  the  volume  together  with 
the  value  of  its  products.  T  hey  not  only 
admit  this,  but  as  agitators  they  argue  on  the 
admission.  Thus,  the  current  annual  value  of 
the  agricultural  output  of  Great  Britain  has  been 
lately  quoted  bv  them,  on  the  authority  of 
the  Census  of  Production,  as  ^220,000,000: 


Chap.  Ill]  AGRICULTURE  245 

and  this  total,  by  a  reformer  of  Mr.  Masterman's 
school,  is  cited  as  evidence  of  a  "  decline  "  in 
our  agricultural  products  which  only  just  fails 
to  fill  reasonable  men  with  "despair."1  Now 
without  going  into  details,  it  will  be  enough  for 
our  immediate  purpose  to  compare  this  admitted 
figure  with  another  which  is  no  less  indubitable. 
In  the  year  1798  it  was  computed  by  Pitt  and 
his  advisers  that  the  income  of  Scotland  was 
about  one  eighth  of  that  of  England  and  Wales. 
Hence,  the  latter  having,  at  the  beginning  of  the 
nineteenth  century,  been  certainly  not  more  than 
;£  1 80, 000,000,  the  entire  income  of  Great  Britain 
cannot  by  any  possibilityhave  much  exceeded, 
if  indeed  it  reached,  a  total  of  ;£ 2 00,000,000. 
In  other  words,  the  present  value  of  the  agri- 
cultural output  alone — the  output  of  that 
industry  which  reformers  describe  as  "dying" — 
is  actually  greater  to-day  than  the  entire  income 
of  the  country  from  all  sources  whatsoever  at 
the  time  when  this  industry,  according  to  the 
doctrine  of  the  reformers,  was  enjoying  a 
prosperity  which  it  has  now  lamentably  lost. z 
With  regard  to  the  alleged  decline  in  the 

1.  See  Report  on  the  Rural  Problem,  by  Mr.  Harben, 
issued  on  behalf  of  the  Fabian  Society,  1913. 

2.  The  wheat-supply  of  England  in  1801  was  sufficient 
for  nearly  the  whole  population,  and  was  about  equal  to 
the  home-grown  supply  to  day.     The  meat-supply  and  the 
supply  of  dairy  and  garden  produce  has  increased  by  70 
per  cent,  since  the  years  1835-40,  if  we  may  judge  by  the 
figures  for  those  years  given  by  McCullock,  as  compared 
with  those  given  in  the  Census  of  Agricultural  Production 
pr  the  year  1907. 


24&  AGRICULTURAL   POPULATION      [Book  IV. 

number  of  the  agricultural  population,  the 
reformers  are  perfectly  correct  in  declaring 
that  a  decline  has  occurred,  and  that  it  is  one 
of  the  most  remarkable  occurrences  of  the 
period  here  in  question.  Their  error,  whether 
this  arises  from  intention  or  helpless  ignorance, 
relates  to  the  date  at  which  the  decline  began. 
That  date  which,  according  to  their  own  asser- 
tions, was  the  beginning  of  the  nineteenth  cen- 
tury, was  not  the  beginning  of  the  nineteenth 
century,  but  the  middle  of  it.  So  far  as  the 
Census  Returns  enable  us  to  speak  with 
accuracy,  up  to  the  year  1851  the  agricultural 
population,  instead  of  declining  in  number, 
continued  steadily  to  increase.  Then,  but  not 
till  then,  did  any  general  decline  begin;  and 
the  present  results  of  this  downward  movement 
have  been  what?  That  the  agricultural  popu- 
lation of  Great  Britain  to-day  is  so  far  from 
being  (as  Mr.  Masterman  suggests)  very  nearly 
extinguished,  that  its  number  is  not  less,  indeed 
appears  to  be  slightly  larger,  than  it  was  in 
what  Mr.  Masterman  represents  as  its  golden 
age;1  whilst,  relatively  to  the  persons  employed, 
the  value  of  the  product  has,  to  say  the  least  of 
it,  doubled  itself. 

Finally,   with   regard   to   the   hopeless   and 

i.  The  approximate  figures  for  England  and  Wales,  as 
discoverable  from  a  careful  examination  of  the  Census 
Returns,  and  the  difference  they  exhibit  in  respect  of 
classification,  are  as  follows  :  Number  of  persons  directly 
engaged  in  Agriculture:  1801,  1,500,000 — 1,600,000;  1851, 
1,900,000 — 2,000,000;  1907 — 1910,  1,500,000 — 1,600,000. 


Chap.  II1.J       AGRICULTURAL    WAGES  «4? 

increasing  poverty  which  is  alleged  by  reformers 
to  be  the  lot  of  the  agricultural  labourer,  it  may 
be  admitted  for  the  sake  of  argument,  or  even 
without  any  such  reservation,  that  his  wages  are 
lower  than  they  should  be,  and  that  means  exist 
for  augmenting  them;  but  the  truth  of  these 
contentions  being  assumed,  the  point  to  be  noted 
is,  that  the  reformers  cannot  express  it  without 
converting  it  into  a  falsehood.  Whatever  may 
be  the  average  wages  of  agricultural  labour 
to-day,  there  is  one  thing  which  they  are  not. 
They  are  not  lower  than  they  were  at  that 
particular  period  whence,  according  to  the 
reformers,  their  tragic  decline  dates.  On  the 
contrary  they  are  incomparably  greater;  and 
their  rise  since  then,  even  if  slow  at  first,  has 
been  continuous.  The  annual  earnings  of  an 
English  agricultural  labourer  were  in  the  year 
1 80 1  commonly  computed  at  £21  a  year. 
Their  average  fifty  years  later  had  risen  to  ^28; 
at  the  present  time,  according  to  the  latest 
information,  it  is  slightly  over  ^45. * 

It  is  outside  the  scope  of  the  present  volume 
to  discuss  the  agricultural  question  in  relation 
to  any  special  policy.  The  point  here  insisted 
on  with  regard  to  the  three  propositions  just 
examined,  which  reformers  enumerate  as  indi- 
cating the  essential  facts  of  the  situation,  is  not 
only  that  they  happen  to  be  false,  but  that  no 
sound  policy  which  has  these  for  its  basis  is 
possible. 

All    parties    alike    would    desire    that    our 

i.  See  Blue-book,  Cd.  4671  of  1909,  p.  36. 


248  AGRICULTURAL   WORKERS    [Book  IV. 

agriculture  as  a  whole  should  in  point  of  pro- 
ductive efficiency  be  very  greatly  increased ;  but 
the  question  really  at  issue  being  how  to  make 
it  greater  than  it  is,  those  persons  are  merely 
darkening  counsel,  and  turning  the  attention  of 
the  public  in  a  totally  wrong  direction,  who 
popularise  a  belief  that  it  is  indefinitely  less 
than  it  was  before  the  "  superwealthy "  had 
crippled  it  in  some  fabulous  though  recent  past. 
Similarly  the  decline  in  the  number  of  the 
agricultural  workers,  is  by  all  parties  alike 
regarded  as  in  itself  a  misfortune;  but  to 
represent  the  decline  as  dating  from  the  begin- 
ning of  the  nineteenth  century,  when  the  actual 
date  was  the  middle  of  it,  is  to  obscure  the  only 
causes  which  can  render  the  event  intelligible. 
The  beginnings  of  the  decline  coincided  with 
the  triumph  of  free-trade  principles;  and  little 
though  the  early  free-traders  may  have  realised 
this  themselves,  to  produce  this  precise  decline 
was  their  logical  if  not  their  conscious  object. 
Their  reasoning  was  the  reasoning  of  all 
business  men.  It  was  mainly  peculiar  and 
efficacious  because  specially  applied  to  corn — 
the  main  food  of  the  people,  specially  the 
food  of  the  poor.  If  ten  men  in  Russia  can 
provide  us  with  twenty  loaves  of  bread,  why 
should  the  poor — such  was  the  gist  of  their 
argument — pay  fifteen  men  in  England  to 
provide  them  with  the  same  quantity?  The 
primary  effect  of  their  free-trade  policy  on 
agriculture  was  a  great  development  of  labour- 
saving  machinery — of  machinery  designed  to 


Chap.  III.]      INFLUENCE  OF  FREE  TRADE  349 

enable  ten  English  bread-producers  to  perform 
the  work  which  had  previously  required  fifteen. 
The  second  result  was  a  development,  gradual 
at  first,  then  rapid,  the  purpose  of  which  was 
similar,  namely  the  saving  of  labour  without 
diminution  of  the  product;  and  this  second 
result  was  the  transference  of  agricultural 
enterprise  from  the  production  of  one  kind  of 
staple  food,  namely  bread,  which  relatively 
to  the  requisite  area  requires  most  labour,  to  the 
production  of  another  kind,  namely  meat,  which 
relatively  requires  least.  The  farmers,  in 
adopting  this  policy,  merely  followed  the  course 
which  the  adoption  of  free-trade  principles  by 
the  nation  at  large  imposed  on  them.  A  decline 
in  the  number  of  the  agricultural  workers 
relatively  to  the  product  of  agricultural  work, 
was  not  merely  a  result  of  free-trade  in  food- 
stuffs. It  was  the  crucial  result  at  which  the 
free-trade  movement  aimed.  These  observa- 
tions are  not  made  with  the  intention  of  advo- 
cating a  return  to  agricultural  protection. 
Their  intention  is  merely  to  indicate  the  com- 
plicated nature  of  the  questions  which  the 
decline  in  the  number  of  the  agricultural 
workers  raises,  and  to  show  how,  if  the  date  at 
which  the  decline  began  is  hidden,  as  reformers 
hide  it,  under  a  flood  of  historical  fallacies, 
all  discussion  of  these  questions  is  a  wrangling 
in  the  dark,  and  all  attempts  to  deal  with  them 
are  leaps  in  the  dark. 

The  same  thing  remains  to  be  said  as  to  the 
third  proposition  of  the  reformers,  which  con- 


250  WAGES    TO-DAY  [Book   IV 

verts  the  contention,  deserving  of  all  respect, 
that  the  agricultural  labourers  should  be  better 
paid  than  they  are,  into  the  sensational  fable 
that  they  are  worse  paid  than  they  were,  and  that 
the  sinister  diminution  in  their  number  has  been 
accompanied  by  a  diminution  no  less  sinister 
in  their  wages.  This  is  not  merely  an  intrusion 
of  fable  into  the  domain  of  fact.  It  is  the 
intrusion  of  a  fable  so  pernicious  in  kind  that, 
of  all  the  facts  involved,  the  fact  which  is  most 
vital  to  the  problem  at  issue  is  hidden  by  it. 
The  vital  fact  is  that,  as  the  number  of  the 
workers  has  diminished,  their  wages,  instead  of 
diminishing,  have  increased  in  almost  the  same 
proportion;  the  remarkable  result  being  (as  can 
easily  be  shown  by  a  careful  examination  of 
the  figures),1  that  two  agricultural  labourers  on 
an  average,  at  the  present  day,  divide  between 
them  a  sum  which  is  slightly  in  excess  of  that 
which  was  divided  between  three  in  the  year 
1850.  The  conclusions  which  may  be  drawn 
from  this  fact  are  various  and  far-reaching. 
What  is  here  urged  is  merely  that  they  are  of 
such  profound  importance  that,  unless  the  fact 
in  question  is  fully  and  fairly  recognised,  the 
future  of  agricultural  wages  and  the  agricultural 
i.  It  appears  that  there  has  been  no  appreciable,  if  any, 
decline  in  the  number  of  agricultural  "  occupiers,"  i.e., 
fanners  of  various  grades ;  the  class  which  has  declined, 
consisting  of  wage-paid  labourers.  The  diminution  of  thes* 
(as  compiled  by  all  parties)  has,  since  the  year  1850,  been 
in  the  ratio  of  about  150  to  100.  The  increase  in  average 
wage-rates  since  1850,  has  been  in  the  ratio  of  100  to  158. 
See  Cd.  4671,  as  above. 


Chap.  III.]       ERRORS  OF  REFORMERS  251 

question  generally  cannot  be  profitably  dealt 
with  by  any  reformer  whatsoever,  whether  he 
be  a  radical  restraining  a  socialist,  a  socialist 
outbidding  a  radical,  or  a  conservative  who, 
borrowing  his  premises  from  one  of  these  or  the 
other,  is  tempted  to  outbid  both. 

Such,  then,  are  some  of  the  particular  errors- 
errors  relating  to  land — which  result  from  the 
general  theory  common  to  all  reformers  that 
the  clue  to  every  social  grievance  is  the  dispro- 
portionate "  piling  up  of  the  aggregations  "  of 
some  small  and  "  superwealthy  "  class  at  the 
growing  expense  of  all  the  rest  of  the  com- 
munity. 

In  the  following  chapter  we  will  turn  to  the 
"  industrial  question  " ;  and  it  shall  be  shown 
how,  in  connection  with  this,  the  same  fallacious 
theory  has  resulted  in  errors  of  an  even  greater 
magnitude. 


CHAPTER    IV. 

IN  so  far  as  it  relates  to  immediate  demands 
and  hopes,  the  "  industrial  question  "  resolves 
itself,  as  has  been  said  already,  into  a  wages 
question  on  the  one  hand,  and  a  profits  question 
on  the  other,  the  second  of  these  being  the 
converse  side  of  the  first. 

The  wages  question,  from  the  point  of  view 
of  the  wage-earners,  has  its  origin  in  two  very 
natural  desires,  one  being  to  maintain  their 
earnings  the  other  being  to  increase  them :  and 
the  latter,  as  experience  shows,  is  no  less 
reasonable  than  the  former.  The  industrial 
history  of  this  country  for  more  than  a  hundred 
years  has  been  a  history,  not  only  of  an  increase 
in  the  production  of  wealth  generally,  but  of 
an  increase  in  the  wages  of  the  individual 
labourer  also,  and  though  reformers  do  their 
utmost  to  hide,  and  actually  to  invert,  this  fact, 
a  large  number  of  the  wage-earners  more  or  less 
clearly  recognise  it.  Hence  the  portion  of 
their  general  thesis  which  reformers  at  the 
present  time — whether  strike-leaders,  profes- 
sional politicians,  or  other  apostles  of  discon- 
tent— find  most  efficacious,  in  many  quarters  at 
all  events,  is  the  contention  that,  even  if 
absolutely  rates  of  wages  have  risen,  they  have 
risen  in  a  far  smaller  ratio  than  the  value  of  the 
total  product;  and  that,  thus  considered  in  the 
light  of  what  at  once  is  just  and  possible,  the 

352 


Chap.  IV.]         THE    WAGES    QUESTION  253 

wage-earners  as  a  body  are  the  victims  of  an 
ever-increasing  wrong.  Here  is  the  old  story 
again  of  "  the  piled-up  aggregations  of  the 
superwealthy,"  carrying  with  it  the  inference 
that  the  only  problem  for  the  wage-earners  is 
how  to  make  new  inroads  on  a  practically 
inexhaustible  hoard. 

This  contention,  as  applied  more  particularly 
to  manufacturing  industry,  has  now  resolved 
itself  into  a  demand  for  a  universal  minimum 
wage.  For  such  a  demand  in  the  abstract  there 
is  much  which  may  be  reasonably  said  :  but 
even  in  the  abstract,  the  question  of  whether  it 
is  reasonable  or  otherwise  implies  a  reference 
to  something  like  actual  facts.  For  example, 
if,  relatively  to  the  population  to-day,  indus- 
trial productivity  to-day  were  no  greater  than 
it  was  at  the  time  of  the  battle  of  Waterloo,  the 
most  moderate  of  the  present  demands  now  made 
in  relation  to  wages  generally  would  have  no 
more  meaning  than  the  baying  of  a  dog  at  the 
moon;  for  the  entire  wealth  of  the  country 
would  be  insufficient  to  satisfy  them.  Practi- 
cally, therefore,  a  minimum  wage  means  nothing 
unless  it  means  a  certain  specific  amount  which 
can  be  compared  with  that  of  the  entire  distri- 
butable product. 

Let  us  then  consider  the  most  recent  of  the 
definitely  formulated  proposals  which  have 
been  put  forward,  in  connection  with  this 
question,  by  prominent  leaders  of  strikes  and  of 
other  reforming  movements.  Such  proposals 
are  all  of  a  double  character.  They  comprise, 


354  A    MINIMUM    WAGE  [Book  IV. 

in  addition  to  a  great  increase  in  wages,  a  great 
reduction  in  the  length  of  the  working  day. 
This  reduction  has,  by  advanced  reformers, 
been  long  defined  as  a  substitution  of  six  daily 
hours  for  nine;  but  the  minimum  wage  to  be 
paid  for  these  six  hours  has  not  till  lately  been 
defined  with  the  same  precision.  Precision 
began — and  it  is  interesting  to  note  this — as 
the  result  of  the  preliminary  issue  of  certain 
portions  of  the  Census  of  Production,  according 
to  which  the  value  of  this  country's  manufac- 
turing output,  if  divided  by  the  number  of 
the  persons  employed  in  producing  it,  would 
work  out  at  something  like  ^100  per  head. 
Hence  it  was  at  once  argued  on  labour  plat- 
forms that,  since  nothing  produces  wealth  but 
ordinary  manual  labour,  the  lowest  wage  which 
is  due  to  the  operatives  of  this  country  cannot 
be  less  than  a  matter  of  forty  shillings  a  week. 
A  minimum  wage,  then,  of  forty  shillings  a 
week,  the  hours  of  daily  labour  per  day  being 
reduced  from  nine  to  six,  represents  the  kind 
of  arrangement  which,  according  to  contem- 
porary reformers,  is  the  least  that  labour  should 
aim  at  as  a  full  satisfaction  of  its  claims.  The 
calculation  is  exceedingly  interesting,  because 
its  bases  can  be  at  once  identified;  and,  by 
examining  these,  we  can  detect  the  manner  in 
which  reformers  reason.  These  bases  are  to 
be  found  in  the  elaborate  summary  which  the 
Census  of  Production  gives  of  the  entire  selling 
value  of  the  products  of  all,  and  of  each 
separate  group,  of  the  chief  manufacturing 


Chap.  IV.J  NEED    OF    CAPITAL  355 

industries  of  Great  Britain  and  Ireland,  and 
of  the  number  of  persons  employed  in  each  of 
them  and  in  all  together.  And  the  results,  so 
far  as  they  go,  are  given  by  the  reformers 
accurately.  The  entire  selling  value  of  the 
output  is,  in  round  figures,  700  million  pounds.1 
The  number  of  persons  employed  is,  in  round 
figures,  seven  millions.  But  the  meaning  of 
these  two  sums  is  very  far  from  being  what,  at 
first  sight,  it  appears  to  be.  There  are  various 
facts  which  the  agitating  reformers  overlook. 

In  the  first  place  the  production  of  the  total 
values  in  question  involves  the  use  of  avast  mass 
of  capital,  which  is  embodied  mainly  in  build- 
ings and  endlessly  elaborated  mechanisms. 
These  buildings  and  mechanisms  would  soon 
be  a  useless  scrap-heap  unless  they  were  subject 
to  a  process  of  constant  renewal  and  repair. 
The  cost  of  this  process,  as  the  Final  Report 
on  the  Census  of  Production  shows,  and  as 
has  also  been  explained  elsewhere  in  the  present 
volume,  comes  out  of  the  product-value — that 
is  to  say,  700  million  pounds;  and  amounts  on 
a  yearly  average  to  £11  per  worker.  Of  those 
workers  whose  earnings  are  less  than  ^160  a 
year,  the  average  actually  earned  per  head  is 

i.  This  does  not  include  the  value  added  by  commercial 
transport  and  distribution,  nor  does  it  include  the  value  of 
the  output  of  a  number  of  minor  industries.  The  workers 
involved  represent  approximately  one-half  of  the  wage- 
mrning  population. 


256  WAGES    AND    PROFITS          [Book  IV. 


If  the  salaried  staff  be  included,  many 
members  of  which  earn  more  than  ;£i6o,  the 
average  earned  per  head  of  the  whole  employed 
body  is  £72.  It  will  thus  be  seen,  in  the  first 
place,  that  out  of  the  £100  per  head,  which 
presents  itself  to  the  fancy  of  the  reformers  as 
available  for  distribution  amongst  the  wage- 
earners,  the  theoretical  maximum  is  not  more 
than  ^"89;  in  the  second  place,  of  this  ^89, 
more  than  80  per  cent,  goes  as  wages  already; 
and  farther,  that  of  every  ^100  of  the  value 
of  the  products  sold,  what  remains  with  the 
employers  for  distribution  as  profits  and 
dividends,  is  ,£17,  or  little  more  than  a  sixth; 
whilst  even  this,  as  the  Census  of  Production 
indicates,  is  considerably  diminished  by  rates, 
and  other  less  important  charges. 

But  this  is  the  beginning,  not  the  end  of  the 
matter. 

These  calculations  assume  that,  except  in 
respect  of  wages,  the  productive  process  will 
remain  what  it  is  to-day,  and  that  the  volume 
and  the  value  of  its  products  will  be,  at  all 
events,  not  less  than  they  are.  It  remains  for 
us  to  take  account  of  the  fact  that,  concurrently 
with  a  rise  of  wages,  the  reformers  demand  a 
reduction  in  the  hours  of  labour.  Now  from 
every  point  of  view  this  demand  is  of  the  first 
importance,  but  more  especially  from  that  of 

i.  The  average  for  all  such  workers,  if  domestic  servants, 
and  agricultural  labourers  be  included,  is,  as  has  been 
Shown  in  a  former  chapter,  about  £6t  per  head.  For  other 
workers  alone  it  is  slightly  more. 


Chap.  IV.]        LABOUR    AND    WEALTH  257 

the  reformers  themselves.  The  very  nature 
of  the  claims  which  they  advance  on  behalf  of 
wage-paid  labour  shows  them  to  be  possessed 
by  the  old  socialist  idea  that  such  labour  is  the 
sole  producer  of  wealth,  and  that  the  amount 
of  wealth  produced  by  a  given  number  of 
labourers  rises  and  falls  with  the  number  of  the 
hours  for  which  they  labour. 1  And  if  other 
conditions  all  remain  unchanged — such  as  the 
knowledge  and  intellectual  energy  by  which 
the  details  of  labour  are  determined,  and  if  the 
hours  devoted  to  labour  are  the  quantity  which 
alone  varies,  this  theory  is  plainly  true.  It  is 
obvious,  therefore,  that  if,  other  things  being 
equal,  the  quantity  of  labour,  as  measured  by 
time,  diminishes,  the  value  of  the  total  product 
will  be  diminished  in  like  proportion.  The 
proposed  reduction  of  labour-hours,  being  a 
substitution  of  six  per  day  for  nine,  or  of  eight 
working  months  in  the  year  for  the  present 
number  of  twelve,  will  reflect  itself  in  the  value 
of  the  product,  which,  from  its  present  total  of 
some  700  million  pounds  will  be  reduced 
accordingly  to  no  more  than  470  millions.  If 
from  this  sum  we  deduct  the  costs  of  upkeep 

i.  This  is  one  of  the  cardinal  doctrines  of  the  "economic 
science"  of  Marx.  It  is  of  course  subject  to  this  qualifica- 
tion, that  the  number  of  labour-hours  regarded  as  possible 
per  day  does  not  exceed  that  for  which  the  physical 
strensfth  of  the  worker  can  be  maintained.  Thus,  though 
a  reduction  of  nine  hours  to  six  means  a  reduction  in  the 
outr-ut,  a  reduction  of  16  hours  to  nine  might  mean  an 
increase. 


«S8  WORKERS   AND   PRODUCTS      [Book  IV. 

of  capital,  the  total  left  for  distribution  amongst 
seven  million  wage-earners  would  work  out, 
should  the  wage-earners  get  the  whole  of  it,  at 
something  slightly  less  than  £60  per  head,  or 
£12  less  than  the  average  which  they  earn  now. 

If,  however,  instead  of  being  content  with 
mere  general  conclusions  such  as  these,  we 
examine  the  industries  individually  to  which 
these  conclusions  refer,  the  facts  of  the  case 
will  reveal  themselves  in  a  yet  more  instructive 
light.  We  shall  find  that  the  value  of  the 
products  as  related  to  the  number  of  the 
workers,  though  amounting  to  a  general  average 
of  ,£100  per  head,  conforms  to  this  average  in 
a  few  of  the  individual  cases  only,  diverging 
from  it  otherwise  in  various  and  most  remark- 
able ways. 

Of  this  the  most  prominent  example  is 
provided  by  a  group  of  industries  which  include 
the  supplies  of  electricity,  gas,  and  water,  but 
which  are  for  the  most  part  of  a  chemical  or 
quasi-chemical  character.1  These  account  for 
an  output  of  130  million  pounds  out  of  a  total 
of  700  millions — that  is  to  say,  nearly  one-fifth 
of  the  whole;  but  they  employ  between  them 
only  one  fourteenth  of  the  workers — that  is  to 
say,  about  500,000.  The  output  per  head 
ranges  from  ^"150  up  to  .£330,  the  average  for 
the  group  being  ^260,  as  against  the  avera_2fe 

i.  These  comprise  oils,  paints,  varnishes,  drugs  and  all 
kinds  of  chamicals,  ink,  artificial  ice,  sugar,  and  the  brew- 
ing or  distillation  of  alcoholic  beverages.  This  group  also 
comprises  publishers. 


Chap.  IV.]  UPKEEP    OF    CAPITAL  259 

of  ^100  for  the  productive  industries  generally. 
The  causes  of  this  phenomenon  have  been  much 
discussed  by  experts.  At  all  events  the  group 
is  an  exception ;  and  its  importance,  as  measured 
by  the  number  of  the  workers,  is  negligible. 

If  for  these  reasons,  then,  we  set  this  group 
aside,  and  deal  only  with  the  great  mass  of  the 
manufacturing  industries  of  the  country,  we  are 
left  with  an  output  value  of  570  million  pounds, 
and  a  working  population  of  six-and-a-half 
millions.  Of  these  workers  collectively,  the 
output  value  per  head  is  ^88.  They  are, 
however,  as  a  fact,  divisible  into  three  great 
sections,  the  output  value  per  head  being  in 
each  case  as  follows.  In  one  section,  compris- 
ing less  than  one-sixth  of  the  whole,  it  is  £126  \l 
in  a  second  section,  comprising  less  than  one- 
quarter  of  the  whole,  it  is  ^87  ;«  whilst  in  the 
third  section,  comprising  far  more  than  one-half, 
it  does  not  exceed  ^78. s  If,  in  respect  of  the 
cost  of  upkeep  of  capital,  we  deduct  from  these 
sums  severally  no  more  than  a  tenth,  the  sums 
actually  distributable  will  be,  about  ^114  in  the 
case  of  one-sixth  of  the  workers;  in  the  case  of 

i  Of  the  1,000,000  workers  comprised  in  this  section 
by  far  the  larger  number  are  coal-miners.  Most  of  the 
others  are  engaged  in  public  works,  cheese-making,  bacon- 
curing  the  preparation  of  preserved  meats  and  pickles, 
and  the  making  of  aerated  waters. 

2.  This  section  comprises  all  the  great  metal  trades. 

3.  This  section  comprises  all  the  textile  trades  except 
lace-making;    also  the  clothing  trades. 


36o  A   MINIMUM   WAGE  [Book  IV- 

a  quarter,  about  ^78;  and  in  the  case  of  more 
than  a  half,  it  will  not  exceed  ^70. 

Here  we  see  what  is  the  real  nature  of  the 
problem  involved  in  the  demand,  based  as  it 
generally  is  on  the  equality  of  human  needs, 
for  a  minimum  wage  which  shall  somehow  be 
secured  to  everybody.  It  is  obvious  that,  in  the 
case  of  no  industry  whatsoever,  can  such  a 
minimum  be  greater  than  the  total  value  of  the 
products  divided  by  the  number  of  the  workers ; 
and,  if  in  any  industry,  a  greater  sum  is  de- 
manded, such  an  industry  can  no  longer  exist. 
It  will  have  to  be  abandoned,  like  a  plot  of 
land  so  barren  that  an  occupier,  paying  no  rent, 
cannot  extract  enough  from  it  to  keep  body  and 
soul  together.  Thus,  though,  in  the  case  of 
one-sixth  of  the  workers — namely  those  em- 
ployed in  the  industries  yielding  an  output  of 
;£ii4  per  head,  a  minimum  wage  of  /"ico 
would  at  all  events  be  theoretically  possible, 
yet  if  this  were  demanded  on  behalf  of  the  great 
mass  of  their  fellows,  the  whole  of  the  industries 
on  which  these  depend  for  their  living,  would 
be  hopelessly  bankrupt  before  a  year  was  over. 
The  highest  minimum  which,  even  in  theory, 
could  possibly  be  made  general,  would  not  be 
more  than  £70  :  and  even  this  would  be  possible 
on  one  condition  only — that  the  number  of 
working  hours  remained  what  it  is  to-day.  If 
this  number  were  reduced  in  the  proportion 
which  the  reformers  contemplate,  the  highest 
general  minimum  could  not  possibly  be  more 
than 


Chap.  IV.]         THE    PROFITS    QUESTION  261 

Let  this  sum  be  compared,  firstly  with  the 
^100  which  the  reformers  regard  as  possible, 
and  declare  to  be  the  minimum  of  what  is  just; 
and  secondly,  with  the  average,  as  already 
shown,  which  is  actually  now  being  earned  by 
workers  of  all  grades;  and  two  things  will  be 
evident.  One  is  the  grotesque  exaggeration 
which,  in  this  case  as  in  all  others,  characterises 
the  reformers'  estimates  of  the  amount  of  wealth 
existing.  The  other  is  the  narrowness  of  the 
margin  which,  in  manufacturing  industry,  divides 
the  present  receipts  of  the  employed  from  the 
total  value  produced. 

But  before  we  insist  on  these  points  farther, 
let  us  consider  the  whole  matter  from  a  fresh 
point  of  view.  Let  us  consider  it,  not  as  a 
wages-question,  but  as  a  profits-question,  which 
is  the  wages-question  inside-out.  About  thirty 
years  ago,  Mr.  Hyndman  became  prominent  as 
the  leader  of  a  socialist  movement  in  England, 
and  as  one  of  the  founders  of  a  body  which 
originally  described  itself  as  the  Social  Demo- 
cratic Federation.  In  this  latter  capacity  he 
issued  a  Manifesto,  which  was  mainly  a  statis- 
tical statement,  emphasised  by  violent  rhetoric, 
as  to  the  actual  ratio  of  profits  to  the  wages  of 
productive  labour.  The  purport  of  this  state- 
ment was  that,  the  income  of  the  United 
Kingdom  being  at  the  date  in  question  1,300 
million  pounds,  the  share  of  the  wage-earners 
was  300  million  only,  the  remaining  1,000 
millions,  of  which  they  alone  were  the  creators, 
being  taken,  under  the  name  of  profits,  by  a 


262  PROFITS    AND    WAGES          [Book  IV. 

class  which,  if  not  absolutely  idle,  was  active 
only  in  the  business,  not  of  production,  but  of 
theft.  Here  we  have  the  doctrine  of  Marx  as 
applied  to  conditions  at  a  certain  specified 
moment;  which  doctrine  was  that,  under  the 
capitalistic  system,  profits  generally,  and  manu- 
facturing profits  in  particular,  are  to  wages  as  a 
whole,  in  the  ratio  of  10  to  3.  It  is  probable 
that  most  reformers  to-day,  even  those  who  call 
themselves  socialists,  would  allow  that  Mr. 
Hyndman's  statement  erred  slightly  on  the  side 
of  exaggeration;  but  the  language  used  by  such 
persons,  from  the  Chancellor  of  the  Exchequer 
downwards,  shows  that  they  regard  it  as  indica- 
tive of  the  kind  of  thing  that  happens. 

Now  if  we  consider  businesses  solely  as 
"  going  concerns,"  the  ratio  of  profits  to  wages 
will  of  course  vary  enormously.  One  reason 
is  that,  in  some  cases,  as  in  that  of  a  railway, 
vast  sums  must  necessarily  be  spent  in  wages, 
before  the  business  can  begin  "to  go"  at  all; 
and  the  wage-bill  for  past,  as  well  as  for  current, 
labour,  must  be  paid  out  of  the  annual  takings 
as  soon  as  these  accrue.  Another  reason  is 
that,  whilst  all  employers  of  labour  must  bring 
to  the  task  of  directing  it  a  certain  amount  of 
ability,  for  otherwise  the  products  of  the  labour 
will  not  even  pay  the  wage-bill,  there  are 
certain  businesses,  such  as  that  of  producing  a 
book,  or  some  patented  mechanical  contrivance, 
in  which  the  element  of  the  ability  involved 
varies  to  so  great  an  extent  that  the  selling  value 
of  the  product  may  be  ten  times  the  amount  of 


Chap.  IV.]        AGGREGATE  OF  PROFITS  363 

the  labour-bill,  or  only  three  times,  or  may  not 
exceed  it  at  all.  Now  it  is  obvious  from  what 
has  been  said  already,  that,  if  profits  be  re- 
garded as  a  quantity  which  can  be  drawn  upon 
to  increase  wages,  the  extent  to  which  they  can 
be  used  for  this  purpose  must  be  determined, 
not  by  the  product  per  wage-earner  which  is 
realised  in  exceptional  businesses,  but  by  that 
prevailing  in  those  which  can  just  manage  to 
maintain  themselves.  For  the  moment,  however, 
let  this  point  be  waived.  Let  us  treat  profits  as 
Mr.  Hyndman  himself  and  other  reformers 
treat  them — that  is  to  say  in  the  mass;  and 
compare  their  actual  aggregate  in  this  country 
to-day  with  the  actual  aggregate  of  industrial 
wages  corresponding  to  them. 

A  broad  comparison  of  this  kind  may  be  made 
in  two  ways. 

If  we  confine  ourselves  to  the  manufacturing 
industries,  as  analysed  in  the  Census  of  Produc- 
tion, we  know  that  the  total  value  of  the  product 
is  about  700  million  pounds,  that  outgoings  in 
respect  of  upkeep  are  about  1 1  per  cent,  of 
this,  and  that  the  net  total  which  is  distributable 
must  accordingly  be  about  620  millions.  Far- 
ther, it  has  been  shown  that  the  wage-earners, 
their  number  (inclusive  of  the  salaried  staff) 
being  seven  million,  earn  on  an  average  ^72  per 
head.  Thus  the  total  wage-bill  comes  roughly 
to  505  millions.  The  amount,  therefore,  which 
remains  for  distribution  as  profits  and  dividends 
will  be  about  115,  or  perhaps  120  million  pounds 
out  of  a  distributable  total  of  620  millions.  In 


264  THE  COUNTRY'S  WAGE  BILL    [Book  IV. 

other  words,  profits  will  be  somewhat  less  than 
one-fifth  of  it. 

Let  us  now  take  all  the  businesses  of  the 
United  Kingdom  together — the  commercial,  the 
carrying,  the  agricultural,  as  well  as  the  manu- 
facturing. In  Chapter  III,  Book  III,  of  the 
present  work,  the  distributable  output  value  of 
all  these  businesses  (profits  from  abroad 
excluded)  were  shown  to  amount  to  about  1,260 
million  pounds,  and  the  total  of  all  profits 
subject  to  income-tax  whether  commercial, 
agricultural  or  industrial,  in  so  far  as  they  are 
of  home  origin,  were  shown  to  amount  to  about 
230  millions.  This  sum  being  deducted  from 
the  total  value  produced,  what  remains  for 
distribution  amongst  the  employees  is  about 
1,030  millions;  and  if  the  analyses  of  business 
wages  and  salaries,  as  given  in  Chapters  II  and 
III  of  Book  III  are  examined,  it  will  be  seen 
that  the  actual  business  wage-bill  of  the  country 
is  substantially  of  the  same  amount.  The  total 
of  all  wages  not  exceeding  635.  a  week,  exclu- 
sive of  those  earned  by  domestic  servants, 
comes  to  about  930  millions,  and  the  total  of 
the  larger  incomes  earned  by  the  salaried  staff, 
and  subject  to  income-tax,  comes  to  100  millions. 
Hence  if  we  take  all  businesses  together,  the 
output  of  which  involves  the  payment  of  wages, 
the  result  is  substantially  the  same  as  in  the 
case  of  manufactures  only.  Profits,  as  a  whole, 
are  indeed  something  less.  To  speak  more 
exactly,  they  are  about  18  per  cent,  of  the  net 


Chap.  IV]      PROFITS  OF  COAL  MINING  265 

selling  value  of  the  entire  distributable  product, 
and  wages  as  a  whole  are  about  82  per  cent. 

Here,  however,  we  have  the  general  average 
only.  In  particular  cases  profits  will  be  rela- 
tively larger,  and  in  the  majority  of  cases  not 
nearly  so  much.  Of  this  latter  fact  it  is  possible 
to  give  an  illustration  which  is  exceptionally 
precise,  and  on  an  exceptionally  large  scale, 
and  with  regard  to  which  there  is  peculiar  and 
direct  evidence.  In  the  case  of  certain  busi- 
nesses, though  of  certain  businesses  only,  the 
gross  profits  (that  is  to  say  profits  including  the 
costs  of  upkeep)  are  specially  stated  by  the 
Commissioners  of  Inland  Revenue.  Of  these, 
for  two  reasons,  the  most  important  is  that  of 
coal-mining :  for  not  only  are  the  profits  stated 
in  one  set  of  returns,1  but  in  another  set  is 
stated  year  by  year  the  actual  corresponding 
value  of  all  the  coal  sold.  In  the  year  1907 — 
that  dealt  with  by  the  Census  of  Production — 
the  selling  value  of  all  the  coal  produced 
(exclusive  of  the  quantity  consumed  by  the 
mines  themselves)  was  ^106,000,000.  The 
gross  profits  (royalties  included)  did  not  amount 
to  so  much  as  ;£  16,000,000;  and  hence  it  is 
sufficiently  obvious  that,  of  the  total  sum  dis- 

i.  The  mining  profits,  as  ear-marked  in  the  returns, 
comprise  a  small  percentage  from  mines  other  than  wool ; 
therefore  the  actual  amount  is  somewhat  less  than  that 
stated  in  the  text.  See  Statistical  Monograph  20,  in 
which  the  figures  relating  to  the  question,  for  a  period  of 
fifteen  years,  are  analysed. 


266  PROFITS  OF  COAL  MINING       LBuok   IV. 

tributable,    the    net    profits    could    not    have 
amounted  to  so  much  as  one-seventh. 

But  other  evidence  may  be  quoted  of  a  kind 
more  precise  still.  During  the  great  coal-strike 
of  the  year  191 1,  a  book  was  issued  by  a  member 
of  the  parliamentary  Labour  Party,  aided  by  a 
North-country  accountant,  in  which  the  balance 
sheet  of  a  colliery  company,  selected  by  the 
authors  as  typical,  was  reproduced  and  analysed. 
The  object  of  these  authors,  though  they  were 
far  from  being  wild  extremists,  was  to  exhibit 
the  gains  of  the  colliery  companies  as  excessive ; 
and  the  details  which,  in  this  instance,  they 
submitted  to  the  public  were  as  follows.  The 
total  receipts  of  the  company  in  question  for  a 
year  were,  in  round  figures,  ,£710,000;  the  total 
spent  in  wages  was  631,000;  the  declared 
dividend  was  ,£39,000;  and  a  sum  about  equal 
to  the  dividend  was  set  aside  as  a  reserve  fund. 
The  principal  comment  of  the  authors  on  these 
items  was  to  the  effect  that  the  actual  profits  of 
the  business  were  understated  by  one-half ;  that 
the  whole  of  the  reserve  fund  ought  properly 
to  have  been  added  to  them;  and  that  the  true 
profits,  instead  of  being  ,£39,000  were  ,£78,000. 
That  the  authors,  who  expressed  their  recogni- 
tion of  such  reserves  as  funds  set  aside  for 
future  business  contingencies,  should  endeavour 
to  represent  them  as  a  species  of  "  concealed 
profits "  is  sufficiently  astonishing ;  but,  even 
if  we  admit  this  contention,  what  is  the  upshot 
of  the  matter  according  to  the  authors  them- 
selves? Tt  is  this — that  in  the  case  of  a  bust- 


Chap.  IV.l  LETCHWORTH  167 

ness  selected  by  themselves  as  typical,  profits 
barely  exceed  one-seventh  of  the  total  disbursed 
as  wages,  and  are,  of  the  total  takings,  not  more 
than  one-ninth. 

Let  us  now  consider  an  example,  the  scale 
of  which  is  minute,  but  which  has  nevertheless 
a  peculiar  interest  of  its  own.  This  is  the  case 
of  a  printing  business,  which  has  been  estab- 
lished at  Letchworth  on  the  basis  of  co-partner- 
ship. The  arrbition  of  the  promoters,  as  set 
forth  by  themselves,  is  to  solve  all  difficulties 
relating  to  profits  and  wages,  by  enabling  the 
workers  to  be  ultimately  their  own  capitalists, 
so  that  wages  and  the  profits  of  capital,  though 
still  theoretically  distinct,  shall  nevertheless  go 
to  the  same  persons.  After  this  business  had 
been  for  some  years  in  operation,  a  balance- 
sheet  was  issued  for  the  year  1911.  It  is  there 
shown  that  the  number  of  workers  was  90,  that 
the  total  earned  as  wages  was,  in  round  figures, 
^5,340,  that  the  total  net  receipts  were  ,£6,310, 
and  the  profits  on  capital  were  ^970.  This 
means  that  wages  were  allocated  at  the  rate  of 
rather  less  than  ^60  per  head,  and  that  profits 
in  each  case  represented  a  bonus  of  ^10,  the 
total  receipts  per  head  being  thus  raised  to  ^70. 
Now  it  may  be  observed  that  the  wages,  as 
calculated  in  this  case,  are  lower  than  the 
general  average  current  to-day  for  labour  of  all 
kinds,  and  that  the  amount  added  to  them  by 
profits  is  thereby  relatively  increased  :  but  even 
so,  it  will  be  seen  that,  of  the  total  net  receint^. 
profits  account  for  less  than  16  per  cent. ;  whPst 


a68  MR.  HYNDMAN'S  THEORIES      [Book  IV. 

if  wages  be  reckoned  according  to  the  normal 
standard,  the  percentage  will  be  less  than  12. 
Moreover,  it  may  be  added  that  wages  and 
profits  together  do  not  in  this  case  yield  more 
than  an  average  per  worker  of  265.  lod.  a  week.1 

According  to  Mr.  Hyndman,  let  it  be  said 
once  more,  the  profits  of  the  capitalists  as  a 
whole  exceed  business  wages  in  the  propor- 
tion of  10  to  3  :  and  the  minds  of  reformers 
generally  are  dominated  by  some  idea  which  is, 
in  its  effects  on  their  general  attitude,  similar. 
If  profits  were  really  what  Mr.  Hyndman 
imagines,  the  business  profits  of  the  United 
Kingdom  to-day  would  be  considerably  in  ex- 
cess of  3,000  million  pounds.  The  actual  sum, 
as  we  have  seen,  is  not  one  twelfth  of  this  sum. 
Profits  by  their  magnitude  are  so  far  from 
dwarfing  wages,  that  wages  on  the  contrary  are 
more  than  four  times  as  great  as  profits  :  and 
the  particular  instances  which  have  just  now 
been  given,  are  not  only  illustrations  of  this 
fact  in  its  general  form,  but  they  illustrate  also 
the  fact,  still  more  important,  that  if  the 
average  of  business  profits  as  a  whole  be  18 
or  even  20  per  cent,  of  the  entire  business 
product,  it  is,  in  the  majority  of  individual 
industries,  a  very  much  smaller  fraction. 

This  latter  fact  is  the  more  important  of  the 

i.  The  workers  are  not  analysed  in  the  statement  issued, 
but  it  may  be  noted  that  average  per  head,  in  a  highly 
skilled  trade,  like  that  of  printing,  is  less  than  the  rate 
of  the  wages  earned  in  the  cotton  trade  by  men  of  all 
grades. 


Chap.  IV.]         WAGES    AND    PRODUCT  260 

two — it  is  indeed  the  salient  fact  of  the  situa- 
tion ;  because,  if  anything  like  a  general  mini- 
mum wage  be  possible,  which  means  more  foi 
the  wage-earners  than  the  absolute  necessaries 
of  life,  its  amount  must  be  limited,  not  by  what 
is  possible  in  the  industries  in  which  the  product 
per  worker  is  greatest,  but  by  what  is  possible 
in  the  case  of  those  in  which  the  product  is 
least.  Such  being  the  case,  the  actual  total  of 
wages  is  divided  from  the  total  product  by  so 
narrow  a  margin,  that  a  general  rise  in  wage- 
rates  is  practicable  in  one  way  only — that  is  to 
say,  by  making  the  total  product  larger,  and  not 
by  encroachments  on  the  margin  as  it  actually 
is.  It  is  in  this  way  only  that  wage-rates  have 
risen  in  the  past ;  and  only  in  the  same  way  can 
they  be  increased  generally  in  the  future.  The 
idea  common  to  reformers,  that  there  is  always, 
under  the  existing  system,  a  vast  hoard  of 
profits  withheld  from  the  mass  of  the  popula- 
tion, and  that  nothing  is  necessary  but  gain 
possession  of  an  ever-increasing  portion  of  it, 
is  not  merely  to  suggest  illusory  conceptions  of 
progress,  but  to  divert  attention  from  the  condi- 
tions which,  so  far  as  wages  are  concerned, 
alone  make  progress  possible. 

The  long  and  short  of  the  matter  is  that  this 
supposed  hoard  is  a  phantom  which,  as  it  floats 
before  us,  imposes  itself  on  our  eyes  as  a  reality ; 
but  the  moment  we  try  to  capture  it  in  any  defi- 
nite place,  it  disappears.  We  have  seen  that  this 
is  so  when  we  try  to  capture  it  in  the  form  of 
land-rent,  whether  this  be  the  rent  of  farms  (a 


270  "  LABOUR    UNREST  "  [Book  IV. 

quantity  which  is  decreasing  absolutely),  or  the 
annual  increase  in  the  rent  of  the  sites  of  urban 
buildings,  or  the  rent  of  land  as  a  whole.  We 
have  now  seen  that  such  is  the  case  also  when 
we  try  to  capture  it  in  the  product  of  manufac- 
turing and  commericial  industry. 

A  not  unnatural  result  of  the  prevalence  of 
such  illusions  (though,  as  will  be  seen  presently, 
they  are  by  no  means  its  sole  cause)  is  the 
condition  commonly  described  as  social  or 
labour  "  unrest."  The  chief  characteristics  of 
this,  which  are  very  curious  and  not  sufficiently 
recognised,  shall  be  considered  in  the  following 
chapter. 


CHAPTER    V. 

A  REFORMER,  who  occupies  a  high  official 
position,  has  made  himself  famous  by  the 
yehemence  of  his  repeated  attacks  on  persons 
who,  while  they  sleep,  grow  rich  through  the 
appreciation  of  their  investments — who  have 
bought  them  at  one  price,  and  whose  brokers 
sell  them  for  a  greater.  But  when  it  hap- 
pened to  become  matter  of  public  knowledge 
that  he  was  an  active  member  of  this  class 
himself,  and  had  only  failed  by  accident  to  be 
a  fortunate  member  also,  he  declared  that  in 
his  own  case — he  being  a  poor  man,  with  an 
income  of  not  much  more  than  ,£5,000  a  year- 
such  methods  of  self-enrichment  were  abso- 
lutely beyond  reproach,  and  that  only  a  "  foul 
lip"  would  dare  to  assert  the  contrary. 
Now  apart  from  certain  circumstances  of  a 
purely  adventitious  kind,  none  of  his  critics, 
whether  their  mouths  were  foul  or  otherwise, 
did  assert  the  contrary.  They  did  not  even 
suggest  it.  Their  contention  was,  not  that  he 
had  done  anything  which  could  be  condemned 
by  other  people,  but  that  he  had  done  some- 
thing which  was  publicly  condemned  by 
himself.  The  incident  in  question,  when 
divested  of  its  personal  associations,  remains 
interesting  as  an  example  of  the  necessary 
contradictions  which  arise,  when  a  reformer, 
whose  reforming  equipment  is  a  set  of  fallacious 

271 


272  THE    FOOD    QUESTION  [Book  IV. 

principles,  finds  them  confronted  with  those, 
much  more  reasonable  in  character,  which  he 
applies  as  a  matter  of  course  to  the  conduct  of 
his  own  life. 

The  principles  of  the  reformers,  however, 
when  applied  to  actual  affairs,  result  in  contra- 
dictions far  more  profound  than  this. 

Let  us  now  pass  to  other  examples,  which  are 
really  important  features  of  the  social  contro- 
versy to-day.  Of  these  some  of  the  most 
remarkable  relate  to  land  and  agriculture. 

There  is  no  contention  more  frequent  in  the 
mouths  of  reformers  than  the  contention  that  a 
proportion  of  the  wage-earners  (variously 
stated,  but  always  alleged  to  be  large)  suffers 
from  the  want  of  food  sufficient  in  amount  and 
quality;  and  whenever  this  generalisation  is 
applied  to  any  group  of  wage-earners  in  par- 
ticular, its  principal  clause  invariably  relates 
to  meat,  and  runs  as  follows  :  "  The  supply  of 
meat  is  so  small,  and  the  price  of  meat  so  high, 
that  such  and  such  persons  only  taste  it  three 
times,  twice,  or  possibly  once  a  week." 

Into  the  merits  of  such  a  contention  we  need 
not  now  enquire.  All  that  concerns  us  here  is 
to  take  it  in  connection  with  another,  equally 
common,  and  advanced  by  the  same  persons. 
This  relates  to  the  decline  in  the  number  of 
agricultural  labourers,  as  caused  by  the  conver- 
sion of  arable  land  into  pasture.  A  given 
amount  of  pastoral  products,  as  measured  in 
terms  of  value,  requires  they  say,  relatively  to 
the  requisite  number  of  acres,  fewer  men  to 


Chap.  V.]       THE  FOOD  OF  THE  PEOPLE  273 

produce  it  than  a  similar  amount  of  the  products 
which  result  from  tillage.  Cattle  accordingly 
flourish  at  the  expense  of  men.  Wealth 
accumulates,  and  the  agricultural  labourers 
decay.  Here  we  have  a  contention  which,  so 
far  as  it  goes,  is  true ;  but  what  is  its  substantial 
meaning?  Pastoral  products  are  virtually 
but  another  name  for  meat,  just  as  the  products 
of  tillage  are  virtually  another  name  for  bread. 
If,  then,  there  is  any  truth  in  the  contention 
that  an  insufficient  supply  of  meat  is  one  of  the 
main  grievances  from  which  the  workers  of  this 
country  suffer,  how  can  it  also  be  a  grievance 
that  agriculture,  as  now  conducted,  aims  mainly 
at  making  the  supply  of  meat  more  plentiful  ? 
Each  of  these  two  grievances  flatly  contradicts 
the  other. 

Again,  when  reformers  are  dealing  with  the 
food  of  the  people,  there  is  one  class  which  they 
adduce  before  all  others  as  the  victims  of 
insufficient  feeding,  and  that  is  the  class  of 
labourers  by  whom  food  is  produced.  Partly 
owing  to  the  superwealth  of  dukes,  partly  to 
the  super-tyranny  of  large  farmers,  or  the  super- 
something  of  something  else — it  does  not  much 
matter  what — the  rural  labourers  are,  according 
to  the  reformers,  more  miserably  underfed  than 
any  other  section  of  the  population.  The 
urban  workers  have  at  all  events  food  enough 
to  keep  them  in  fit  condition  to  perform  the 
tasks  assigned  to  them;  but  the  agricultural 
labourers  go  always  with  such  empty  stomachs 
that  their  arms  can  hardly  lift  the  implements 


374       "THE  AGRICULTURAL  LABOURER"  [Book  IV. 

with  which  they  hoe  potatoes.  They  are  not 
so  much  men  as  crippled  shadows  of  men ;  and 
their  children,  after  a  childhood  of  weeping 
over  half-empty  platters,  are,  when  they  reach 
maturity,  little  better  than  the  shadows  of  a 
shade.  No  wonder  that,  under  such  conditions, 
the  agricultural  population  declines,  and  the 
whole  nation  is  suffering  a  fatal  and  untold  loss. 
Such,  according  to  the  reformers,  is  one 
aspect  of  the  agricultural  question  :  but  when 
they  turn  to  another,  which,  from  a  national 
point  of  view,  is  what  gives  the  first  its  impor- 
tance, the  grievance  on  which  they  insist  with 
an  emphasis  no  less  eloquent,  is  of  a  curiously 
different  character.  The  principal  ground  on 
which,  from  the  point  of  view  of  the  nation, 
they  bewail  the  decline  in  the  number  of  the 
agricultural  labourers,  is  that  of  all  sections  of 
the  population  these  labourers  are  the  most 
virile  and  the  healthiest.  The  soldiers  who 
confronted  Napoleon  a  hundred  years  ago,  the 
most  stalwart  of  the  policemen  who  patrol  our 
streets  to-day,  were  and  are,  we  are  told,  reared 
in  our  agricultural  cottages,  and  the  men  who 
live  in  such  cottages  are  still  the  best  men  we 
have  .  '  The  agricultural  labourer,"  said  Mr. 
Lloyd  George  at  Middlesbrough,  "  is  a  strong 
sturdy  fellow.  He  has  great  powers  of 
endurance;  and  when  the  tim^  comes  for  the 
great  employers  of  labour  to  pick  and  choose 
between  the  men  they  have  got  and  the  a<m- 
tural  labourer,  the  latter,  with  his  stronger 
physique,  manages  to  survive  in  the  selection." 


Chap.  V.)      CONTRADICTORY  THEORIES  375 

Here,  then,  are  t\vo  of  the  main  indictments 
now  urged  by  reformers  against  the  existing 
agricultural  system.  They  are  urged  alter- 
nately, urged  with  equal  emphasis,  by  the  same 
agitators  in  the  course  of  the  same  month;  and 
are  cheered  alternately  by  precisely  the  same 
audiences.  Either  of  them  may  conceivably  be 
true ;  but  it  is  impossible  that  they  can  both  be 
true.  In  proportion  as  there  is  sense  in  the 
one,  the  other  is  necessarily  nonsense.  How 
can  the  agricultural  labourers  be  so  crippled  by 
underfeeding  that  the  utmost  they  can  do  is  to 
totter,  under  a  load  of  rheumatism,  from  the 
cradle  into  an  early  grave,  and  be  at  the  same 
time  "  fellows  so  sturdy  and  of  such  endurance" 
as  to  render  them  the  arch-embodiments  of  the 
physical  manhood  of  the  nation? 

But  these  astonishing  self-contradictions  of 
reformers  in  respect  of  land  are  merely  exam- 
ples of  the  errors  and  uncertainties  of  thought 
which  vitiate  their  attitude  towards  social 
conditions  generally,  and  arise  directly  or 
indirectly  from  the  fallacy  of  their  primary 
assumption — the  assumption  that,  to  whatever 
extent  the  wealth  of  the  country  grows,  an 
overwhelming  share  of  it,  and  a  share  which  is 
relatively  as  well  as  absolutely  increasing,  is 
appropriated  by  some  rich,  or  rather  by  some 
super-rich,  minority.  From  this  assumption  it 
follows,  as  has  been  said  already,  that  all  reform 
must,  in  its  last  analysis,  consist  of  getting  the 
whole  or  most  of  the  supposed  plunder  back 
and  the  first  practical  step  which  the 


276        MARX  AND  GEORGE  ON  PLUNDER  [Book  IV. 

reformers  have  to  take  is  to  discover  in  what 
place  the  great  bulk  of  it  has  been  hidden. 

What,  then,  have  they  to  say  as  to  this 
fundamental  question?  Certain  of  their  asser- 
tions have  been  reviewed  in  previous  chapters. 
They  shall  be  reviewed  once  more,  together  with 
certain  recent  modifications  of  them. 

First  and  foremost  come  those  of  two  really 
powerful  thinkers,  Marx  and  Henry  George. 

Marx  asserted  that  the  great  bulk  of  the  plun- 
der went,  in  the  form  of  profits,  to  thegreat  capital- 
ist lords.  George  asserted  that  it  did  nothing 
of  the  kind — that  the  whole  of  it  went,  as  land- 
rent,  to  dukes  and  earls  and  squires.  Radicals 
repudiate  the  assertions  of  Marx  and  George 
alike,  but  they  pick  out  various,  and  mutually 
exclusive,  parts  of  them,  each  of  which,  succes- 
sively or  alternately,  they  declare  to  be  greater 
than  the  whole.  The  more  moderate  socialists 
of  to-day  follow  the  same  procedure  :  and  the 
different  accounts  given  by  these  reformers 
collectively  of  how  the  wealth  of  the  people  is 
eaten  up  by  the  super-rich  may  be  summarised 
as  follows  in  a  sequence  of  separate  statements. 

It  is  absurd  to  say  of  the  income  of  the 
United  Kingdom  that  most  of  it  is  absorbed  by 
land-rent,  for  the  total  of  land-rent  is  too  small. 
What  is  really  eating  up  the  wealth  of  the 
people  is  not  land-rent  as  a  whole,  but  the 
annual  increase  of  a  fraction  of  it — namely 
annual  increase  of  the  rent  of  the  sites  of  urban 
,  buildings. 


Chap.  V.]        CONFLICTING    THEORIES  277 

What  is  eating  up  most  of  the  wealth  of  the 
people  is  not  interest  on  capital,  if  capital  be 
considered  as  a  whole;  for  the  active  users  of 
capital  receive  no  more  than  they  deserve. 
What  is  eating  up  the  wealth  of  the  people  is 
interest  on  that  part  of  it  which  is  owned  by 
mere  investors,  such  as  holders  of  Marconi 
shares. 

What  is  eating  up  the  wealth  of  the  country 
is  not  interest  on  the  whole  of  even  this  par- 
ticular part.  It  is  interest  on  only  so  much  of 
it  as  goes  to  persons  whose  incomes  are  not 
much  more  than  ,£5,000  a  year. 

What  is  eating  up  the  wealth  of  the  people  is, 
in  any  case,  the  income  of  persons  with  more 
than  ,£5,000  a  year. 

What  is  eating  up  the  wealth  of  the  people 
is  the  income  of  persons  with  more  than  ^"20,000 
a  year. 

What  is  eating  up  the  wealth  of  the  people 
is  interest  on  capital  after  all,  if  the  word 
"  capital  "  be  used  in  its  widest  sense  :  for  most 
of  the  capital  of  this  country  consists  of  the 
gitts  of  nature.  Of  this  natural  capital,  as  Mr. 
Lloyd  George  said  at  Swansea,  by  far  the 
largest  part,  in  point  of  value,  consists  of  our 
great  coal-deposits;  and  what  is  really  eating 
up  the  wealth  of  the  people,  is  interest  on  these 
coal-deposits,  which  is  known  under  the  name 
of  royalties. 

The  reformers,  in  short,  agree  with  one 
another  as  to  one  thing  only — that  there  is  a 
vast  mass  of  secreted  treasure  somewhere;  but 


278  CONFLICTING   THEORIES        [Book  IV. 

one  of  them  says  it  is  here,  another  says  it  is 
there;  and  few  of  them  agree  with  themselves 
for  more  than  two  years  running.  Their  own 
"  unrest,"  or  the  "  unrest "  which  they  en- 
deavour to  foment,  is  like  the  "  unrest "  of 
the  relations  of  a  defunct  miser,  who  are  per- 
suaded that  he  has  hidden  in  his  house  some 
enormous  amount  of  cash,  and  who  gather 
there  after  the  funeral  in  order  to  find  their  own. 
He  has  made  them,  before  his  death,  a  paltry 
gift  of  ,£2,000  between  them;  but  this,  they 
think,  is  only  a  tenth  of  what  will  be  theirs 
presently.  The  most  knowledgeable  of  their 
number  are  deputed,  before  anything  is  broken 
open,  to  mark  the  receptacles  which  are  likely 
to  be  the  chief  hiding-places.  A  cellarette 
under  the  dining-room  sideboard  is  at  once 
marked  amidst  acclamations.  "  Listen,"  cries 
an  expert,  "  you  can  hear  the  sovereigns  chink. 
You  can  tell  by  the  weight  of  the  thing  that  at 
least  there  are  fifteen  hundred  of  them."  The 
lid  is  smashed,  and  there  the  sovereigns  are; 
but  instead  of  fifteen  hundred  the  number  of 
them  is  less  than  seventy.  A  second  expert 
exclaims,  "  You  are  looking  in  the  wrong  place. 
The  bulk  of  the  stuff  is  here — in  this  padlocked 
tin,  labelled  '  dog-biscuit.'  Talk  about  four- 
teen hundred  !  Here  are  a  good  three  thou- 
sand. Bring  the  poker  and  let  us  see."  The 
poker  is  used.  The  tin  is  half  full  of  pennies. 
On  the  top  of  the  pennies  lie  some  sovereigns, 
but  their  number  is  no  more  than  twenty. 
''  Fools,"  a  third  expert  exclaims,  "  to  be 


Chap.  V.]       "  CONCEALED    TREASURE  "  279 

looking  amongst  bottles  and  biscuits.  Here  are 
five  thousand  hidden  amongst  the  coals  in  the 
coal-scuttle."  The  coals  accordingly  are 
emptied  out  on  the  floor,  and  amongst  the  dust 
is  discovered  the  shining  of  ten  half-crowns. 
A  fourth  voice  exclaims,  "  Don't  waste  your 
time  downstairs.  Quick,  follow  me  to  his  bed- 
room. It  is  all  sewn  up  in  his  mattress."  The 
mattress  is  ripped  open.  The  carpet  is  strewn 
with  horse-hair.  From  amongst  the  horse-hair 
comes  a  crisp  crackle  of  something.  The 
relations  are  all  on  their  knees  feeling  for  bank- 
notes :  and  nothing  rewards  their  search  but 
some  fragments  of  torn  brown  paper.  Sud- 
denly from  under  the  bed  a  portly  cat  emerges. 
A  little  girl,  who  had  stayed  with  the  deceased 
frequently,  recognises  an  old  playmate,  and 
addresses  it  by  the  name  of  "Duke."  On  one  of 
the  relations,  who  happens  to  be  the  Chancellor 
of  the  Exchequer,  the  effect  of  the  word  "Duke" 
is  electrical.  '  There,"  he  exclaims,  "  there  is 
the  object  of  our  search  at  last.  The  missing 
ten  thousand  sovereigns  have  been  eaten  up 
by  the  cat."  Hereupon  ensues  the  crowning 
act  of  the  drama.  A  new  actor  enters,  the  late 
miser's  solicitor.  "  Don't  lose  heart,"  he  says 
with  an  encouraging  smile.  "  How  much  have 
you  found?  Ah,  just  as  I  thought.  Ninety 
pounds,  or  a  hundred.  Well,  the  rest  is  here — 
here  in  this  very  room.  You  can  all  of  you 
find  it  without  moving  a  step."  "  Where,"  cry 
the  relations  in  chorus.  "  For  mercy's  sake  tell 
us  where."  "  I  will/'  the  newcomer  replies, 


a8o  ANSWER   TO   REFORMERS       [Book  IV. 

"  It  is  all  in  your  own  pockets."  There  is  a 
speechless  gasp  of  consternation,  and  the  same 
speaker  proceeds.  "  My  late  friend,"  he  says, 
tk  during  the  course  of  his  last  illness  divided 
amongst  you  a  couple  of  thousand  pounds. 
Apart  from  the  hundred  which  you  have  just 
discovered  for  yourselves,  that  was  his  whole 
fortune.  The  odd  hundred  will,  I  am  sure,  be 
extremely  welcome.  It  will  pay  nearly  half 
the  expenses  of  getting  yourselves  here  and 
home  again." 

And  the  same  answer  is  the  true  answer  to  all 
social  reformers  who,  reasoning  and  feeling  on 
the  supposition  that  the  root  of  most  social  evils 
is  the  abstraction  by  the  few  of  the  bulk  of 
current  wealth  from  the  many,  set  themselves  to 
discover  exactly  where  the  bulk  of  current 
wealth  is  hidden.  The  answer  is  "  The  bulk 
of  it  is  in  your  own  pockets  already." 

The  chief  of  the  detailed  facts  which  have 
been  elucidated  in  the  preceding  shall  now  be 
reconsidered  in  a  manner  which  will  put  this 
this  statement  to  the  test. 


CHAPTER   VI. 

THE  final,  the  most  general  and  the  most 
comprehensive  test  to  which  we  can  put  the 
theory  that  some  vast  hoard  of  wealth  is  with- 
held from  the  majority  by  the  few,  is  to  take 
the  whole  mass  of  incomes  subject  to  income- 
tax,  and  consider  how  much  would  be  available 
for  redistribution,  if  all  of  them,  or  as  many  of 
them  as  rise  above  certain  sums,  were  divided 
according  to  principles  of  the  crudest  socialistic 
equality,  or  such  drastic  graduation  as  finds 
favour  with  extreme  radicals. 

In  the  year  1910  the  net  total  of  such  incomes 
was,  as  we  have  seen  already,  about  720  million 
pounds.  Thus,  the  number  of  direct  recipients 
being  about  1,400,000,  and  these  together  with 
their  families  representing  a  population  of  about 
7,000,000  persons,  their  average  income  per 
head  was  a  little  over  ^"100.  On  the  other 
hand  the  number  of  the  population  not  subject 
to  income-tax  being  38  millions,  and  the  aggre- 
gate income  of  these  persons  being  1,300 
million  pounds,  their  average  income  per  head 
was  no  more  than  ^34.  Such  being  the  case, 
socialists  will  probably  argue  that,  if  the  income 
of  the  richer  classes  were  cut  up  into  38  million 
equal  shares  of  ^19,  a  bonus  of  £19  would  be 
forthcoming  for  every  member  of  the  poorer 
classes,  the  average  income  of  each  being  raised 

from  ^34  to  ^53. 

981 


282  EQUALIZING    INCOMES          [Book  IV. 

In  such  a  calculation,  however,  the  following 
fact  is  ignored,  that,  if  all  the  incomes  of  the 
present  rich  and  poor  are  to  be  equalised,  the 
present  rich  must  at  all  events  be  left  with 
something;  and  this  cannot  be  less,  just  as  it 
cannot  be  more,  than  the  present  average  per 
head  of  the  present  population  as  a  whole; 
which  average  being  a  forty-five-millionth  part 
of  a  national  income  of  just  over  2,000  million 
pounds,  is  approximately  ^45.  Accordingly 
the  share  of  the  income  now  subject  to  income- 
tax,  which  would  have  to  be  left  with  those  who 
at  present  receive  the  whole  of  it,  would  be  ^45 
per  head  of  some  seven  millions  persons,  or  315 
millions  out  of  a  total  of  720  millions.  The 
result  of  which  fact  is  that,  under  a  regime  of 
equal  distribution,  the  present  average  per  head 
of  the  classes  not  subject  to  income-tax  would 
be  raised  from  ,£34  to  ^45,  not  from  ^£34  to 
^53.  The  theoretical  bonus  would  be  not 
^19,  but  £11. 

Such  would  be  the  case  on  the  supposition 
that  the  720  millions  was  diminished  only  by 
the  amount  which  its  present  recipients  would 
retain.  But  this,  as  shall  now  be  shown,  is  very 
far  from  being  the  case. 

Independently  of  any  claims  on  the  part  of 
its  present  recipients,  there  are  three  portions 
of  the  income  subject  to  income-tax  which  any 
attempt  at  redistribution  on  the  equalising  prin- 
ciples of  socialism  would  altogether  eliminate. 

In  the  first  place  there  is  the  portion  which 
comes  into  this  country  from  abroad. 


Chap.  VI.]       INCOME   FROM   ABROAD  083 

In  the  second  place  there  are  certain  sums 
'commonly  described  by  statisticians  as  being, 
for  income-tax  purposes,  "  counted  twice  over." 

In  the  third  place  there  are  savings,  which, 
if  not  made  by  the  rich,  would  have  to  be  made 
by  the  nation. 

The  primary  result  of  the  adoption  of 
socialistic  principles  would  be  the  disappear- 
ance of  the  income  from  abroad.  It  would 
disappear  for  two  reasons;  and  if  both  of  them 
were  not  operative,  either  one  of  them  would 
be  sufficient.  One  reason  is  that  the  owners 
would  cease  to  import  it;  for  who  would  import 
goods  for  the  pleasure  of  seeing  them  confis- 
cated? The  other  is  that,  even  if  it  reached 
these  shores,  a  socialist  Government  would  be 
bound  not  to  receive  it.  As  Mr.  Keir  Hardie 
on  one  occasion  very  logically  observed,  the 
"  profits  or  income  from  abroad "  ought,  on 
socialist  principles,  "  never  to  come  into  this 
country  at  all,"  but  ought,  we  may  suppose  him 
to  have  meant,  though  he  did  not  explicitly  say 
so,  to  remain  in  the  countries  whence  it  came, 
and  be  redistributed  there.  The  profits  from 
abroad,  which  are  included  in  the  income  now 
subject  to  income-tax,  amount,  as  has  been 
explained  already,  in  reality  to  more,  and  at  all 
events  not  to  less,  than  190  million  pounds.1 

i.  This  includes  about  ^10,000,000,  in  respect  of  profits 
of  commercial  distribution,  which  would  cease  if  the 
income  from  abroad,  in  the  form  of  goods  to  be  distributed fr 
no  longer  came  into  this  country. 


284  SUMS    COUNTED    TWICE         [Book  IV. 

Here  is  the  first  deduction  from  the  total  of 
720  millions. 

The    second    deduction    consists    of    sums 
counted  twice  over.     As  examples  of  the  sums 
which  this  phrase  is  used  to  describe,  we  may 
take  the   payments  made  by  a  man  of   large 
means  to  a  confidential  agent,  whom  he  would 
probably  call  "  a  treasure,"  and  to  some  distin- 
guished doctor.     He  pays  his  agent  (let  us  say) 
,£1,000  a  year;  and  taking  it  into  his  head  one 
day    that    he    is    threatened    by    some    mortal 
disease,   he   pays   ^"1,000   to   some    doctor  of 
European  celebrity  for  coming  from  London 
to  the  South  of  France  to  visit  him.     Now  both 
these  sums  of  ,£1,000  it  is  argued,  figure  first  in 
the  income-tax  returns  as  income  of  the  man 
who  pays  them,  and  then  figure  as  income  of 
the  men  to  whom  they  are  paid.     If,  however, 
we  take  things  as  they  actually  are  to-day,  this 
argument  is  fallacious.     It  would  be  true  only 
on  the  assumption  that  the  rich  man,  instead  of 
spending    so    much    of    his    income,     simply 
alienates  so  much  of  his  fortune — that  he  gives 
so  much  away,  and  gets  nothing  in  return  for 
it.     As  a  matter  of  fact,  in  each  case,  he  receives 
a  specific  value  which  for  him  is  a  full  equiva- 
lent— the    luxury    of    advice    from    his    agent, 
which  relieves  him  of  all  business  worries;  the 
luxury  of  an  opinion  from  a  doctor  who  reassures 
him   with   regard   to   his   health,    as   no    other 
doctor   could    have    done;    and    these    values, 
though  they  are  mental  and  not  material,  are 
values  as  truly  as  they  would  be  if  thev  con- 


Chap.  VI.]  MENTAL  AND  MATERIAL  VALUES     285 

sisted  of  chairs  and  tables.  But  whilst  such  is 
the  case  so  long  as  fortunes  remain  unequal  it 
would  cease  to  be  the  case  the  very  moment  we 
tried  to  equalise  them;  and  the  ordinary  con- 
tention as  to  values  of  this  kind,  would  at  once 
become  correct.  The  reason  is  that  values  of 
this  particular  kind  are  values  only  in  concen- 
tration, and  are  essentially  not  distributable. 
We  can  see  this  by  considering  what  would 
happen  if,  instead  of  paying  one  doctor  a  fee 
of  £  1,000,  our  patient  had  summoned  a 
thousand  doctors,  for  the  purpose  of  debating 
on  his  ailments,  and  had  paid  each  of  them  a 
fee  of  twenty  shillings.  The  thousand-pounds- 
worth  of  satisfaction  received  by  him  from  this 
medical  parliament  would  be  only  mental  or 
subjective,  but  it  would  be  susceptible  of  distri- 
bution none  the  less;  for  the  rich  man's  ^1,000 
if  given  to  a  thousand  poor  men,  would  enable 
each  to  secure  the  attendance  of  one  of  the 
doctors  which  the  rich  man  would  have  other- 
wise monopolised.  But  if  all  large  incomes 
were  divided  up  into  little  ones,  a  fee  of  a 
pound  would  be  as  much  as  could  be  paid  by 
anybody  to  any  doctor,  no  matter  how  eminent; 
and  so  far  as  the  medical  specialist  whose  case 
we  have  been  imagining  is  concerned,  there 
would  be  nothing  to  divide  but  his  railway  fare. 
The  same  argument  applies  to  houses  which, 
standing  on  exceptional  sites,  command  excep- 
tional rents  because  rich  men  compete  with  one 
another  for  their  occupation.  A  house  with  a 
view  from  its  windows  of  unique  and  renowned 


a86  FANCY  VALUES  [Book  IV. 

beauty,  may  command  a  rent  of  ^"500  a  year, 
whereas  nobody  would  give  £100  for  it  were 
it  situated  in  a  field  in  Essex.  This  sum  of 
jCsoo  figures  in  the  income  on  which  the  lessee 
pays  income-tax.  The  same  sum  figures  in  the 
taxed  income  of  the  lessor.  In  connection  with 
the  ownership  and  the  occupation  of  this  house 
the  income-tax  returns  would  show  a  total  of 
;£i,ooo.  But  if  all  large  incomes  were  so 
levelled  down  and  reduced  that  a  house-rent 
of  ,£100  a  year  was  the  utmost  that  could  be 
paid  by  anybody,  this  particular  ^1,000, 
as  soon  as  the  redistributors  touched  it,  would 
shrivel  away  to  a  sum  which  could  not  exceed 
£200.  There  would  be  nothing  to  divide  but 
the  ownership  of  this  one  house  and  its  occu- 
pancy, the  former  of  which  would  represent 
£100  to  the  owner,  whilst  the  latter  represented 
another  ^100  to  the  occupant.  Only  these  two 
sums  would  remain.  Four-fifths  of  the  original 
total  would  have  vanished  into  thin  air. 

Here  we  have  two  classes  of  this  kind  of 
income,  and  to  one  or  other  of  them  all  such 
income  belongs.  It  is  a  kind  of  income  con- 
sisting of  fancy  values  represented  by  fancy 
prices  as  paid  by  rich  men,  either  for  specific 
and  exceptional  services,  like  those  of  a  great 
doctor,  or  for  exceptional  things,  like  a  building- 
site  of  unique  beauty.  It  may  be  argued  that 
such  fancy  values  are  not  real  income  in  any 
case.  The  contention  is  untrue  ;  but  even 
were  it  true,  it  would  not  concern  us  here. 
What  concerns  us  here  is  the  fact  that,  whether 


Chap.  VI.]     PROFESSIONAL   SERVICES  287 

they  are  real  income  or  no,  they  figure  as  such 
in  the  records  of  income  subject  to  income-tax. 
They  go  to  make  up  the  net  total  of  that  income 
which  appears  from  those  records  to  be  about 
720  millions;  and  that  total,  if  these  portions 
are  eliminated,  is  thereby  decreased.  The 
sum  which  these  portions  represent  has  by 
certain  statisticians  been  over-estimated.  It  is 
at  all  events  considerable;  and  what  is  really 
its  approximate  amount  is  not  difficult  to  calcu- 
late. 

So  far  as  professional  services  are  concerned 
the  amount  may  be  calculated  thus.  We  may 
take  it,  if  the  object  in  view  is  a  regime  of 
equalised  wealth,  that  the  total  at  present  paid 
for  such  services  represents  fancy  values  in  so 
far  as  it  yields  an  income  per  head  of  the 
professional  classes  which  exceeds  what  would, 
if  all  incomes  were  equalised,  be  the  average 
family  income  in  all  classes  alike.  That 
average  could  not,  as  we  shall  see  presently,  be 
even  in  theory,  more  than  ,£200.  Now  the 
actual  average  earnings  of  the  professional 
classes  to-day  appears  from  an  examination  of 
the  income-tax  returns  to  be  about  ,£350.  This 
means  that  of  the  payments  made  to  the  profes- 
sional classes  to-day  the  portion  which  is  fancy 
value  amounts  to  40  per  cent.,  and  if  this  ratio 
be  applied  to  professional  earnings  as  a  whole — 
the  estimated  total  being,  as  we  have  seen,  about 
^"60,000,000 — the  deduction  to  be  made,  if  the 


388  FANCY    VALUES  [Book  IV. 

fancy   value   is   to    disappear,   will    be    about 

;£24,OOO,OOO.1 

The  element  of  fancy  values  now  included  in 
site-rents  may  be  calculated  in  a  similar  way. 
If  every  average  family,  consisting  of  five 
persons,  had  ^200  a  year,  and  no  such  family 
had  more,  no  family — this  we  may  reasonably 
assume — would  be  able  to  spend  on  house-rent 
more  than  £20  a  year.  This  means  a  site-rent 
of  ^4,  or  1 6s.  per  person.  Of  the  400,000 
houses  worth  more  than  ^40  a  year,  the 
average  gross  rent  per  house  is  about  ^100 
a  year,  and  the  average  site-rent  about  £2O\ 
but  for  this  class  of  houses  the  average  number 
of  occupants  is,  owing  to  the  presence  of  ser- 
vants, not  five  per  house,  but  is  very  nearly  nine ; 
so  that,  taken  per  head  of  the  occupants,  the 
site-rent  will  be  approximately  465.  This  is 
305.  more  than  the  maximum  site-rent  per  person 
which  by  any  possiblity  could  be  paid  if  no  aver- 
age family  had  more  than  £200  a  year.  We  may 
therefore  take  it  that  this  extra  thirty  shillings 
represents  the  fancy  value  which  persons  whose 
incomes  range  from  ^"400  a  year  upwards 
attach  to  certain  sites  in  virtue  not  of  their  area, 
but  of  their  beauty,  their  convenience,  or  of  their 

i.  In  strictness,  about  ^5 ,000,000  should  be  added  to  the 
present  salaries  to  Government  officials,  from  Cabinet 
Ministers  downwards.  The  argument  in  the  text  does  not 
apply  to  the  salaries  of  business  employees ;  for  these  are 
paid  for  services  which  result  in  the  production  and  distri- 
bution of  material  goods,  which,  unlike  fancy  services,  are 
in  their  nature  distributable. 


Chap.  VI.]          DIVISION    PER    HEAD  289 

fashionable  or  quasi-fashionable  character. 
Such  persons,  together  with  their  families  and 
their  servants  (for  the  servants'  accommodation, 
just  like  that  of  their  employers,  is  paid  for  at 
a  fancy  rate)  make  up  a  population  of  about 
3,600,000  individuals;  or,  if  we  take  account  of 
Ireland,  which  the  above  figures  exclude,  the 
total  number  here  in  question  will  amount  to 
about  4,000,000,  each  unit  of  which  will,  in 
respect  of  site-rent,  represent  a  fancy  value 
averaging  about  305.;  the  aggregate  of  fancy 
site-values  being  thus  about  ,£6,000,000. 

Here,  then,  we  have  three  sums,  namely 
^190,000,000  in  respect  of  income  from  abroad, 
^24,000,000  in  respect  of  fancy  values  attached 
to  professional  services,  and  ^"6,000,000  in 
respect  of  fancy  values  attached  to  selected 
building-sites;  these  three  items  amounting  to 
220  million  pounds,  which  would  have  to  be 
deducted  from  a  total  of  720  millions  before 
the  residue  was  reached  which,  even  in  theory, 
was  susceptible  of  redistribution.  This  means 
that  the  theoretically  redistributable  total,  so 
far  as  we  have  yet  considered  the  matter,  would 
be  500  million  pounds.  This,  added  to  a  non- 
assessed  income  of  1,300  million,  means  a 
national  income  of  1,800  millions,  which, 
divided  amongst  a  population  of  45  million 
individuals,  means  an  income  per  head  of  £$o. 
The  present  average  per  head  of  individuals 
dependent  on  incomes  not  subject  to  income- 
tax,  is,  as  we  have  seen  already,  ^34.  Hence, 
if  no  modifying  facts  still  remained  to  be 


290  SAVINGS  [Book  IV. 

considered,  an  equalising  redistribution  of  the 
total  of  all  incomes  in  excess  of  ^160,  would 
mean  for  those  whose  incomes  are  now  on  a 
smaller  scale,  an  average  addition  per  head  of 
£6  to  ^34 — that  is  to  say  an  increase  of 
approximately  17  per  cent. 

But  a  farther  modifying  facts  remains  in  the 
background  still,  to  which  allusion  has  already 
been  made,  and  which  we  must  now  examine. 
This  is  the  fact  that  out  of  the  entire  national 
income  there  is  a  considerable  portion  which  is 
annually  not  spent  but  saved,  and  that  the 
larger  portion  of  the  annual  savings  of  the 
nation  consists  of  savings  made  by  the  richer, 
not  by  the  poorer,  classes.  Of  what,  then  let 
us  ask,  do  savings  in  their  ultimate  form  con- 
sist? They  do  not  consist,  or  consist  only  to 
a  very  small  extent,  of  hoards  of  money  or  even 
of  consumable  commodities.  They  consist  of 
money  values  converted  into  new  structures, 
mechanisms  and  other  plant  by  means  of  which 
new  commodities  may  be  produced  and  distri- 
buted, or  else  into  permanent  utilities,  the  chief 
of  which  are  new  houses.  The  annual  savings 
of  the  country,  according  to  the  Census  of  Pro- 
duction, amount  to-day  to  about  ,£270,000,000. 
Of  this  total,  in  the  year  1907,  about 
£ 1 00,000,000  was  represented  by  exports  con- 
sisting of,  or  destined  to  be  converted  into,  imple- 
ments of  British  enterprise,  production  or  distri- 
bution, in  countries  other  than  our  own;  the 
remainder  represents  similar  things  or  imple- 
ments situated  in  the  United  Kingdom,  and 


Chap.  VI.]  SAVINGS  391 

(except  in  the  case  of  ships)  not  removable 
therefrom.  These  things  and  their  values  were 
in  round  figures  as  follows : — Manufacturing 
and  commercial  plant,  ^93,000,000;  Public 
Utility  Services,  such  as  Gas,  Water  and 
Electricity,  ,£11,000,000;  Ships  and  Railway 
Extension,  ,£8,000,000  each;  and  new  private 
houses,  ,£50,000,000. 

Let  us  see  what  practically  these  savings 
mean.  As  a  matter  of  pure  business,  their 
object  is  the  production  of  income  in  the  form 
of  new  profits  for  division  between  the  active 
users  of  the  saved  capital  on  the  one  hand,  and 
mere  lenders  or  investors  of  it  on  the  other. 
The  total  return  looked  for  will  be  now  about 
6  per  cent.,  of  which  half  will  be  the  reward  of 
use,  and  half  will  be  the  reward  of  mere  saving 
or  investment,  though  the  users  and  the  inves- 
tors will  be  in  many  cases  the  same  persons. 
Such  being  the  case,  we  might  expect  on  general 
principles  that  a  saving  in  one  year  of  270 
millions  would  result  in  new  profits  to  the  extent 
of  some  £ 1 6,000,000  in  the  next.  Farther, 
since  (with  certain  exceptions,  all  profits  carry 
with  them  a  corresponding  amount  of  wages) 
we  might  expect  to  discover  in  wages  a  corres- 
ponding increase  also.  And  such  results,  we 
find,  have  actually  taken  place.  The  net  total 
of  incomes  subject  to  income-tax  in  the  year 
1908  exceeded  the  net  total  for  the  year  1907 
by  about  ,£21,000,000.  Of  this  sum,  however, 
about  ,£5,000,000  was  not  profits  but  wages— 
that  is  to  sav  the  s?!nries  of  new  emplovees  at 


aga  WAGES    AND    PROFITS          [Book  IV. 

salaries  exceeding  .£160.  The  increase 
in  profits,  interest  or  dividends,  amounted 
accordingly  to  about  ;£  16,000,000.  Of  this 
sum  about  ,£7,000,000  came  from  abroad; 
about  ,£3,000,000  was  the  rent  of  houses;  and 
about  £6,000,000  was  new  profits  or  interest 
from  industrial  and  commercial  undertakings 
situated  in  the  United  Kingdom.  Let  us  now 
take  the  question  of  wages.  It  has  already 
been  explained  that,  in  the  case  of  profits  from 
abroad,  though  they  carry  with  them  corres- 
ponding wages,  these  wages  must  be  looked  for 
in  countries  other  than  our  own.  They  make 
no  show  in  the  accounts  of  the  British  Islands. 
House-rent  is  also  peculiar,  although  in 
another  way.  A  house  yields  a  profit  to  the 
builder  and  wages  to  the  builder's  workmen, 
whilst  the  process  of  construction  lasts;  but 
whereas  a  factory  and  its  equipments  yield  no 
return  to  anybody  unless  they  are  used  by  a 
number  of  wage-paid  workers  the  occupation- 
value  of  a  house,  as  represented  by  the  rent 
paid  for  it,  is  enjoyed  by  the  members  of  the 
occupying  household  directly,  without  the 
intervention  of  any  other  labour  than  their  own. 
It  is,  then,  only  in  connection  with  the  profits 
of  about  ,£6,000,000,  which  result  from  the 
creation  of  new  manufacturing  plant  and  kin 
dred  equipments,  in  England,  Scotland  and 
Ireland,  that  a  corresponding  increase  in  wages 
paid  in  this  country  is  to  be  expected;  and  since 
profits  as  a  whole  appear,  as  we  have  seen 
already,  to  be  something  like  a  fifth  part  of  the 


Chap.   VI.]          WAGES    AND    SAVINGS  293 

total  distributable  product,  we  should  expect 
that  profits  to  the  extent  of  ,£6,000,000  would 
carry  with  them  some  wage-bill  of  ,£24,000,000 
or  thereabouts :  and  a  portion  of  such  an 
increase  can  be  very  easily  identified.  Though 
the  rise  in  wage-rates  has  for  some  years  been 
very  slow,  it  appears  that  in  the  year  1908  they 
showed  an  average  increase  over  those  of  the 
twelve  months  preceding,  which,  though  less 
than  i  per  cent.,  is  perceptible,  amounting  to 
something  like  ,£8,000,000 :  and  to  this  sum 
must  be  added  the  increase  of  ,£5,000,000  in 
respect  of  new  wages  and  salaries  exceeding 
635.  a  week.  But  if  the  total  of  new  wages 
approaches  the  sum  just  mentioned,  something 
like  half  has  still  to  be  found  elsewhere.  And 
here  we  are  brought  to  what  is  really  the  most 
important  feature  of  the  situation. 

As  the  population  increases,  the  ranks  of  the 
working  classes  are  every  year  augmented  by 
new  recruits,  amounting  in  number  to  nearly 
one-fifth  of  a  million;  and  the  wages  of  these 
new  wage-earners  make  up  an  aggregate  of 
approximately  12  million  pounds — the  amount 
requisite  to  complete  the  24  million  estimated. 
Thus  the  total  return  which  the  nation  as  a 
whole  receives  for  a  year's  savings  of  270 
million  pounds  is  approximately  40  millions,  of 
which  new  wages  account  for  24  millions,  profits 
of  new  home  businesses  for  6  millions,  the 
occupation-value  of  new  houses  for  3  millions, 
and  profits  from  abroad  for  7  millions.  The 
actual  loss,  therefore,  by  savings,  in  respect  of 


294  LIFE    INSURANCE  [Book  IV. 

spendable  income,  is  not  270  millions,  but  only 
230;  and  the  question  is  out  of  whose  pockets 
do  these  millions  come? 

About  40  millions  are  saved  in  the  form  of 
life-insurance  premiums,  of  which  28  millions 
are  paid  by  persons  not  subject  to  income-tax.1 
It  would  farther  appear  that  such  persons  make 
savings  of  other  kinds,  notably  in  the  form  of 
house-property,  the  total  of  which  would  appear 
to  be  somewhat  in  excess  of  ^3O,ooo,ooo.2  It 
may  therefore  be  reasonably  estimated  that  out 
of  a  loss  of  230  millions  in  respect  of  imme- 
diately spendable  income,  the  savings  of  the 
poorer  classes  account  for  about  60  millions, 
the  remainder  being  saved  by  persons  subject 
to  income-tax.  This  remainder,  however — 
namely,  170  millions — comprises  more  than  10 
millions  in  respect  of  life-insurance  premiums, 
which  sum  has  been  deducted  already,  in 
reducing  the  taxable  income  from  the  so-called 
"  gross  amount "  to  the  net.  The  net  total, 
therefore,  being  about  720  millions,  the  amount, 
in  respect  of  saving,  which  has  to  be  deducted 

1.  In  the  year  1907  the  total  of  life-insurance  premiums 
was  nearly  .£40,000,000,  of  this  nearly  £12,000,000  came 
from  persons  subject  to  income-tax,  and  figures  among  the 
statutory  deductions,  as  not  representing  income  till  the 
decease  of  the  persons  insured. 

2.  The  income  from  real  property  going  to  persons  with 
less  than  £160  a  year,  and  to  charities,  increased  at  the 
rate  of  about  £1,500,000  a  year,  between  the  years  1901  and 
1908.      See   Statistical  Monograph,  13;     also  Reports  of 
Commissioners  of  Inland  Revenue. 


Chap.  VI.]          SPENDABLE    INCOMES  295 

from  this,  will  be  approximately  160  millions. 
If  to  this  deduction  be  added  the  bulk  of  profits 
from  abroad,  and  the  element  of  fancy  values 
which,  if  incomes  were  equalised,  would  dis- 
appear— these  two  items  amounting  to  about 
220  millions — the  total  to  be  deducted  will  be 
380  millions  before  we  reach  the  directly 
spendable  residue  which  socialists  would  find 
available,  according  to  their  own  principles,  for 
re-division.  Profits  from  abroad,  and  the 
element  of  fancy  values,  both  would  go  for 
reasons  already  stated.  The  element  of  sav- 
ings, minus  the  return  accruing  from  it,  would 
go  also  for  reasons  equally  cogent;  for  if  they 
were  not  made  by  individuals  they  would 
necessarily  be  made  by  the  State.  The  State 
would  either  seize  them  before  anything  was 
distributed  at  all,  or  extract  them  by  taxation 
afterwards.  In  no  case  would  they  remain  with 
private  citizens  for  the  purposes  of  direct  enjoy- 
ment. 

Thus  out  of  the  total  of  those  net  spendable 
incomes  in  excess  of  ;£i6o  a  year,  which 
amounts,  as  things  are,  to  some  720  millions, 
all  that  would  remain  for  division  would  be 
340  millions,  or  considerably  less  than  half. 
,The  present  aggregate  of  incomes  not  subject 
to  income-tax  would  at  the  same  time  be 
appreciably  diminished  also;  but  even  if  we 
ignore  this  fact,  the  present  income  of  the 
nation  would  be  reduced  from  something  over 
2,000  millions  to  1,640  millions.  This,  divided 
amongst  45  million  individuals,  would  mean  an 


296  EQUALIZATION    OF    INCOMES    [Book  IV. 

average  per  head  of  ^36  a  year.  This  only 
exceeds  by  ijd.  a  day  what  is  the  average 
income  per  head  of  the  poorer  classes  now. 

It  may,  however,  be  said  truly  that  an  absolute 
equalisation  of  incomes  on  the  principles  of 
ideal  socialism  is  not  "  practical  politics." 
Indeed  many  socialists  themselves  not  only 
admit  this  fact,  but  insist  on  it,  relegating 
absolute  equality  to  some  indefinite  future ; 
whilst  with  radicals — even  with  such  of  them  as 
are  tinged  with  socialistic  sympathies — absolute 
equality  is  not  one  of  even  their  professed  aims. 
It  is  certainly  no  part  of  the  programme  of  the 
present  Radical  Government.  Not  only  has  a 
leading  member  of  that  Government  boasted 
that,  apart  from  the  landlords,  he  had  the 
support  of  most  of  the  richest  men  in  the 
country :  but  he  and  his  colleagues  are  so  far 
from  wishing  to  equalise  incomes,  that  they 
have  themselves  created  a  number  of  new  ones, 
in  addition  to  perpetuating  others,  all  of  them 
vastly  in  excess  of  any  average  that  could 
possibly  be  general.  What  they  profess  to  aim 
at  is  not  an  equalisation  of  wealth,  but  some 
process  which  they,  bishops  in  their  palaces 
joining  them,  describe  as  a  "  better  distribution" 
of  it;  and  since  this  involves  an  attack  on 
existing  wealth  of  some  sort,  their  concern  is, 
in  so  far  as  they  are  practical  men,  to  pick  out 
certain  portions  of  the  income  subject  to  income- 
tax,  and  concentrate  their  assaults  on  these, 
whilst  leaving  the  rest  in  a  state  of  untouched 
security. 


Chap.  VI.]         QUEST   FOR   PLUNDER  397 

Now  such  a  process  of  selection  can  be  based 
on  one  or  the  other  or  both  of  two  principles 
only.  The  incomes  to  be  attacked  may  be 
selected  on  account  of  their  origin  or  else  on 
account  of  their  magnitude;  or  of  their  origin 
and  their  magnitude  together. 

Now  we  have  already  seen  the  results  of  the 
radical  quest  for  incomes  which  are  assailable 
on  account  of  their  origin.  All  land-rent;  all 
profits  on  capital;  parts  of  land-rent;  parts  of 
the  profits  on  capital,  all  have  been  advertised 
as  so  many  mines  of  treasure,  from  which 
social  salvation  may  be  extracted  at  the  expense 
of  the  present  recipients;  but  every  test  or  trial 
has  resulted  in  abject  failure,  partly  because  the 
sums  in  question  are  so  ludicrously  less  than 
was  imagined;  partly  because  in  each  case, 
though  a  portion  goes  to  rich  men  whom  the 
radicals  might  be  pleased  to  injure,  a  proportion 
far  larger  goes  to  a  multitude  of  poor  men,  or 
men  poor  comparatively,  whom  it  is  the  object 
of  the  radicals  not  to  plunder,  but  to  conciliate. 
Thus  to  refer  once  more  to  a  matter  of  which 
mention  has  been  made  already,  we  have  the 
authority  of  Mr.  Lloyd  George  for  saying  that 
whatever  may  be  laid  down  as  to  the  unearned 
increment  of  interest,  in  so  far  as  it  goes  to  men 
conspicuously  rich,  only  "  a  foul  lip "  will 
name  it  as  an  object  of  special  attack,  in  so  far 
as  it  goes  to  men  whom  he  describes  as 
"  comparatively  poor."  In  short,  on  any  prin- 
ciples other  than  those  of  a  crude  socialism 
which  the  radicals  emphatically  repudiate,  it  is 


298  DISTRIBUTION    OF    WEALTH    [Book  IV. 

impossible,  if  incomes  are  classified  with  regard 
to  their  origin  merely,  to  stigmatise  any  group 
of  them  as  more  suitable  than  any  other  for 
being  specially  and  preferentially  robbed  to 
finance  a  social  millennium,  or  to  "  bring  about 
a  better  distribution  of  wealth." 

The  primary  basis  of  discrimination,  if  any 
discrimination  is  to  be  made,  must  relate  to  the 
magnitude  of  the  incomes,  not  to  any  peculiarity 
in  their  origin.  The  only  two  classes  of  income 
which,  in  respect  of  their  origin,  radical  ingenuity 
has  contrived  to  stigmatise  as  wholly  peculiar, 
are  mining  royalties  and  the  increases  of  urban 
ground-rent;  but  as  these  two  sums  together 
come  to  only  a  halfpenny  in  the  pound  of  the 
national  income,  and  less  than  three  halfpence 
in  the  pound  of  the  income  subject  to  income- 
tax,  it  is  a  little  difficult  to  see  how  any  super-tax 
placed  on  them,  even  if  it  amounted  to  as  much 
as  25  per  cent.,  could  produce  "  the  better 
distribution  of  wealth  "  which  radicals  advertise 
as  their  object,  or  could  appreciably  alter  the 
existing  distribution. 

If  the  incomes  to  be  consumed,  or  partially 
melted  away,  on  the  altar  of  "  better  distribu- 
tion "  are  primarily  selected  for  sacrifice  on 
account  of  their  individual  magnitude  (allow- 
ance perhaps  being  made  for  various  extenuat- 
ing circumstances)  we  have  what  Americans 
would  call  a  much  more  reasonable  "  proposi- 
tion." Here  we  have  the  principle  of  all 
graduated  taxation;  and  if  the  object  of  taxation 
is  merely  to  provide  a  revenue  sufficient  for  the 


Chap.  Vi.J        INCOMES  AND  TAXATION  299 

purposes  of  national  defence  and  government, 
the  principle  is  neither  novel  nor  unjust;  still 
less   is    it    revolutionary.       If,    however,    such 
raxes,  as  they  exist,  are  to  be  supplemented  by 
new  ones,  the  object  of  which  is  neither  the 
maintenance  of  government  nor  defence,  but 
the   transference   of   private  wealth   from   one 
class  of  citizens  to  another,  there  is  no  logical 
limit    to    this    species    of    enterprise    but    that 
imposed  by  the  total  amount  of  the  incomes  on 
which  it  is  proposed  to  operate,  and  there  is  no 
excuse  for  it  but  the  likelihood  of  some  reason- 
able  consonance   between  its   utmost  possible 
results,  and  those  which  the  would-be  operators 
invite  the  public  to  expect  from  it.     All  ques- 
tions, therefore,  of  justice  to  individuals  being 
waived,     the     primary     question     for     radical 
reformers  is  what  precise  degree  of  heat  in  the 
tube  of  the  financial  thermometer  must  a  man's 
income  register  before  it  is  rendered  liable  to 
some   special   loss   by   "  transference  "  ?      For 
there  must  be  some  freezing-point  below  which 
incomes  will  be  safe,  unless  all  are  to  be  reduced 
to  one  general  average.     The  second  question, 
this  point  being  settled,  is  what  is  the  aggregate 
amount  of  those  incomes  which  it  is  proposed  to 
victimise.     Let  us  begin,  then,  at  the  bottom  of 
the  scale,  working  our  way  upwards.     We  may 
safely  say,  then,  that  no  radical  reformers,  not 
even  those  whose  radicalism  inclines  to  social- 
ism, would  propose   to   diminish   by   any   new 
scheme  of  transference  incomes  not  exceeding 
..£400.     Mr.  John  Burns  in  his  early  socialistic 


300  DISCORDANT    THEORIES         [Book  IV. 

days,  named  ^"500  as  the  limit  of  legitimate 
safety.  Influential  and  trusted  members  of  the 
Labour  Party  in  Parliament  make  no  objection 
— and  they  are  very  sensible  men — to  earning 
in  addition  to  their  Parliamentary  incomes  .£300 
as  secretaries  to  some  Labour  Association ;  and 
may  also  make  as  much  as  ,£5  a  week  by  con- 
tributions to  the  radical-socialist  press.  An 
income  of  ,£1,000  a  year  may  in  this  way  be 
earned  easily;  nor  would  those  who  could  thus 
earn  it  see  anything  in  it  which  marked  it  out 
for  plunder.  A  distinguished  man  of  letters, 
who  describes  himself  as  a  moderate  socialist, 
has  admitted  that  he  made  by  his  writings 
;£2,ooo  a  year  at  least,  and  declared  that  such 
a  sum  was  less  than  they  were  fairly  worth. 
Mr.  Money  who,  of  the  reformers  of  to-day, 
can  alone  claim  to  be  a  statistician,  states,  as  we 
have  seen  already,  that  riches  in  an  invidious 
sense  only  begin  with  incomes  of  "  several 
thousands"  :  whilst  the  most  important  evidence 
of  all  is  supplied  by  the  present  Government 
itself,  which  not  only  continues  to  maintain 
more  than  80,000  posts,  the  incomes  attached 
to  which  range  upwards  to  ,£10,000  a  year,  but 
has  also  in  a  single  twelve-month  created  3,000 
new  ones.  We  may  assume  then,  with  regard 
to  the  radical  or  radical-socialist  reformers  who 
now  talk  about  a  better  distribution  of  wealth, 
that  the  amount  to  which  incomes  may  rise, 
without  being  liable  to  diminution  by  some 
special  process  of  transference,  is  placed  by  one 
group  at  .£1,000  a  year,  by  another  at  ,£5,000; 


Chap.  VI.  J  INCOME    TAX  301 

and  that  the  practice  of  the  present  Government 
raises  it  to  at  least  ,£10,000;  whilst  the  language 
in  which  wealth  is  described  by  all  reformers, 
indifferently  when  it  is  presented  as  an  object 
of  attack  to  the  imagination  of  the  public 
generally,  is  language  which  would,  as  has  been 
pointed  out  already,  be  meaningless  as  applied 
to  incomes  of  less  than  .£20,000. 

Let  us,  then,  in  the  light  of  our  previous 
examination  of  the  question,  review  once  more 
the  total  income  subject  to  income-tax,  together 
with  the  incomes  and  the  number  of  the  various 
groups  of  recipients,  as  they  would  present 
themselves  to  a  reformer  who  was  in  search  of 
material  fit  for  transference. 

The  recipients,  numbering  as  a  whole  about 
1,400,000,  he  would  find  to  comprise  over 
660,000  salaried  employees,  over  300,000  em- 
ployers (all  shopkeepers  and  dealers,  subject  to 
income-tax,  being  included),  over  200,000  pro- 
fessional men,  and  about  20,000  large  farmers, 
the  total  number  of  such  persons  being  about 
1,250,000,  and  the  remainder  consisting  of 
persons  living  on  their  own  means,  about  half 
of  whom  are  men  retired  from  business,  a 
certain  number  widows  and  spinsters,  and  some 
tens  of  thousands  are  men  commonly  called 
f"  leisured,"  and  living  on  inherited  fortunes, 
not  many  of  which  are  large.1 

x.  These  figures  are  derived  from  the  Census  of  1901  (the 
tetter  figures  being  not  yet  available)  and  in  each  case  there 
will  have  been  an  increase  during  the  ten  years  following. 


303  INCOMES    AND    RENT  [Book  IV. 

Of  this  body  of  1,400,000  persons  in  receipt 
of  incomes  exceeding  ^160  a  year  about  one 
million  would  be  found  living  in  houses  the 
rental  value  of  none  of  which  exceeded  ^40  a 
year,  the  average  rental  being  slightly  under 
^30,  the  average  income  of  the  occupants  being 
about  ^260,  and  the  aggregate  income  about 
^"260,000,000.  About  330,000  persons  would 
be  found  living  in  houses  the  rental  value  of 
none  of  which  exceeded  ;£ioo,  whilst  that  of 
the  large  majority  of  them  was  not  much  more 
than  ^50,  the  average  income  of  the  occupants 
being  less  than  ,£700  a  year,  and  their  aggregate 
income  being  about  200  millions. 

These  two  groups  of  houses  having  been 
scrutinised  by  the  radical  reformers,  we  may 
assume  that  their  door-posts  would  be  marked, 
as  though  the  occasion  were  a  fiscal  Passover. 
The  destroying  angels  of  "  a  better  distribution 
of  wealth  "  would  leave  the  householders,  with 
their  parlour-maids  or  their  "  generals  "  undis- 
turbed, and  would  concentrate  their  attention 
on  the  superior  residences  remaining,  whose 
porticoes  or  whose  lodge  gates  were  in  them- 
selves invitations  to  plunder.  A  census  of  such 
residences  having  been  taken,  what  would  the 
number  of  them  turn  out  to  be?  If  allowance 
be  made  for  the  fact  that  a  certain  number  of 
persons  occupy  more  than  one,  the  number  of 
houses  worth  over  ;£ioo  a  year  would  prove  to 
be  not  more  than  73,000.  Of  these,  about 
1 1 ,000,  as  we  have  direct  means  of  knowing, 
would  be  occupied  by  persons  whose  incomes 


Chap.  VI.]        ANALYSIS    OF    INCOMES  303 

exceeded  ,£5,000;  whilst  62,000  would  be 
occupied  by  persons  whose  incomes  lay  between 
that  sum  and  ,£1,000. 

The  aggregate  income  of  these  two  groups 
appears,  if  we  take  the  figures  for  1910,  to  be 
approximately  the  same,  each  amounting  to 
about  130  millions,  and  the  total  for  the  two 
being  about  260  millions.  Here,  then,  if  any- 
where, we  come  to  the  persons  and  the  income 
from  whom  and  from  which  the  proposed  trans- 
ferences are  to  be  made.  Let  us  consider  what, 
on  the  principles  of  radicalism,  if  these  be 
stretched  to  the  utmost,  could  be  transferred 
from  this  total  for  the  purposes  of  "  a  better 
distribution  of  wealth."  In  order  to  arrive  at 
an  answer,  the  two  groups  in  question  must  each 
be  re-examined  and  subdivided.  It  will  be 
found,  from  an  analysis  of  the  evidence  sup- 
plied by  houses,  that  the  aggregate  of  incomes 
between  ,£1,000  a  year  and  ,£5,000  consists  of 
two  equal  portions  of  about  65  millions  each, 
one  of  which  consists  of  about  40,000  incomes 
averaging  ,£1,500*  a  year,  and  the  other  of 
20,000  incomes  averaging  ,£3,000  a  year.  With 
regard  to  incomes  exceeding  ,£5,000,  we  know 
that  about  80  millions  of  the  aggregate  is 
divided  amongst  10,000  people;  and  about 
^50,000,000  amongst  a  thousand.  Such  being 
the  case,  then,  let  us  suppose  that  the  radical 
reformers  are  addressing  each  of  these  four 

i.  Of  houses  worth  from  £100  a  year  to  .£200,  about  45,000 
are  worth  ,£120  a  year,  about  17,000  are  worth  ^170,  these 
sums  being  averages. 


304  FOUR  GROUPS  OF  INCOMES      [Book  IV. 

groups  of  persons  in  turn.  The  utmost  that 
could  be  said  by  even  the  most  extreme  of  them 
would  be  as  follows. 

To  the  poorest  of  the  four  groups  they  would 
say,  "  Here  are  40,000  of  you,  each  with  an 
income  of  £  1,500  a  year.  In  addition  to  the 
tax  which  you  pay  upon  this  already,  we  will, 
with  a  view  to  '  transferring  '  it,  take  from  you 
an  extra  twentieth."  This,  in  round  figures, 
will  come  to  ,£3,000,000. 

To  the  second  group  they  would  say,  "  Here 
are  20,000  of  you,  each  with  an  income  of 
,£3,000.  In  addition  to  the  tax  which  you 
already  pay  upon  this,  we  will,  with  a  view  to 
'  transferring '  it,  take  from  you  an  extra 
fifteenth."  This,  in  round  figures,  will  come  to 
about  ,£4,000,000. 

To  the  third  group  they  would  say,  "  Here 
are  10,000  of  you,  each  with  an  income  of 
,£8,000.  In  addition  to  the  income-tax  and  the 
super-tax  which  you  pay  upon  this  already,  we 
will  take  from  you  an  extra  tenth  by  means  of  a 
super-super-tax,  which  in  round  figures  will 
come  to  about  ,£8,000,000. 

To  the  fourth  group — to  the  possessors  of 
those  fortunes  which  alone  are  conspicuous — 
they  would  say,  using  more  ceremony,  "  Here 
are  1,000  of  you — mostly  men  of  industrial  and 
scientific  genius,  whose  energies  have  enriched 
the  nation  to  an  extent  seven  times  greater  than 
they  have  ever  enriched  yourselves,  and  we 
regard  those  energies  as  '  one  of  our  chief 
national  assets.'  You  have  between  you  an 


Chap.  VI.]  "  TRANSFERENCES  "  305 

income  of  a  little  over  ^50,000,000 ;  and  there- 
fore in  addition  to  the  income-tax  and  the  super- 
tax which  you  pay  upon  this  already,  we  propose 
by  a  super-super-tax  to  take  from  you  an  extra 
quarter.  This,  we  reckon  gives  us  about 
2"  1 3, 000,000." 

The  total  of  these  sums — the  utmost  which, 
according  to  their  own  principles,  the  radicals 
could  collect  for  transference — is  about 
^28,000,000.  Were  such  a  sum  raised  as  a 
war-tax,  it  would  no  doubt  be  considerable ;  but 
regarded  as  a  transference  of  private  income 
from  the  richer  classes  to  the  poorer,  with  the 
object  of  enabling  tens  of  millions  of  people  to 
imitate  habits  which  at  present  are  confined  to 
some  tens  of  thousands,  it  would  not  only  be 
inadequate,  it  would  be  absolutely  inappreci- 
able. It  must,  moreover,  be  remembered  that 
most  radicals,  even  in  theory,  would  confine 
their  "  transferences "  to  incomes  which  were 
not  less  than  ^5,000  a  year,  as  we  definitely 
know  from  information  provided  by  the  Chan- 
cellor of  the  Exchequer,  who  declares  that  even 
that  sum  is  by  no  means  sufficient  for  himself. 
It  must  be  remembered  farther  that  even  if  the 
operation  of  transference  should  be  extended  to 
all  incomes  in  excess  of  a  single  thousand 
pounds,  more  than  a  third  of  the  total  which 
would  be  thus  earmarked  for  attack  is  saved  at 
present  in  the  form  of  productive  capital,  for 
the  purposes  of  extending  those  industries 
which  are  the  ultimate  source  of  all  incomes 
alike.  Hence,  if  the  transferences,  whose 


306  RADICAL    REFORMERS  [Book  IV. 

object  is  a  ".better  distribution  of  incomes/'  are 
not  to  be  made  by  diminishing  the  national 
capital,  the  utmost  sum  which  for  this  object 
radicals  could  look  forward  to  extracting  would 
not  be  as  much  as  £28,000,000.  It  could  not 
exceed  ,£18,000,000. 

Such  would  be  the  case  if  the  sum  in  question 
be  calculated  with  reference  to  the  principles 
which  radical  reformers  definitely  and  specifi- 
cally formulate.  It  cannot  be  doubted,  how- 
ever, that  the  principles  which  they  definitely 
formulate  differ  very  considerably  from  the  idea 
which  they  are  intended  to  suggest,  and  which  is 
alone  operative  on  the  multitudes  to  whom  such 
reformers  appeal.  This  idea,  which  has  been 
examined  in  these  pages  already,  consists  of  an 
identification  of  the  "  rich  "  as  they  are  to-day 
with  persons  whose  fortunes  are  sufficient  to 
render  their  way  of  life,  their  entertainments, 
their  yachts,  their  purchases  of  art  treasures, 
and  even  their  wives'  ornaments,  spectacular- 
persons  who  could  not  possibly  play  the  most 
modest  of  the  parts  imputed  to  them,  on  any- 
thing less  than  ,£20,000  a  year.  These  are  the 
people  whose  wealth  is  supposed  to  be  so 
boundless  that  the  transference  of  even  a  part 
of  it  would  suffice  to  transform  the  world. 

Such  an  idea,  as  has  already  been  pointed 
out,  is  very  far  from  unnatural ;  and  an  interest- 
ing passage  may  be  quoted  from  a  speech  by 
Mr.  Bonar  Law,  in  which  he  said  that,  apart 
from  the  question  of  its  accuracy,  it  was  one 
which  was  so  natural  that  he  could  himself 


Chap.  VI.]  MR.    BONAR    LAW  3°7 

sympathise  with  it,  and  to  which  he  gave  vivid 
expression  by  means  of  a  short  anecdote.  He 
happened,  he  said,  to  have  been  dining  recently 
at  one  of  the  few  really  great  houses  in  London, 
and  his  hostess,  with  a  glitter  of  gold  plate 
before  her,  with  a  wineglass  in  which  the  rarest 
of  champagnes  was  expending  its  bubbles  for 
her  benefit,  and  a  menu  at  her  side  comprehend- 
ing the  costliest  of  the  world's  delicacies,  asked 
him  what  was  the  cause  of  the  "  unrest  so  preva- 
lent in  the  modern  labour-world."  '  I  think," 
said  Mr.  Law,  "  I  can  tell  you.  What  the 
wage-earning  classes  want  is  that  you  should 
have  a  little  less  of  this  sort  of  thing,  and  that 
they  should  have  a  little  more  of  it."  Here, 
no  doubt,  we  have  a  good  diagnosis  of  the 
malady.  The  malady  is  an  imaginative  want. 
The  question  is  whether  the  want  is  a  want  of 
something  which  is  possible,  or  whether  it  is 
the  want  of  something  which,  in  the  nature  of 
things,  is  not.  The  question,  as  Mr.  Law  thus 
sets  it,  is  very  easily  answered.  The  richest 
men  of  London,  such  as  Mr.  Bonar  Law's  host, 
must  certainly  be  men  whose  incomes  exceed 
^20,000  a  year.  Of  such  men  the  aggregate 
income  is  a  little  over  ^50,000,000  a  year.  If 
savings  be  deducted  as  not  directly  distribut- 
able, the  amount  remaining  for  the  purchase  of 
the  "  this  sort  of  thing  "  in  question,  will  be 
barely  more  than  ^30,000,000.  If  only  "  a 
little  of  this  sort  of  thing  "  is  to  be  taken  from 
the  present  possessors,  that  "  little  "  can  hardly 
mean  more  than  a  good  half  of  their  present 


308  TRANSFERENCES  [Book  IV. 

spendable  income;  and  a  half  might  possibly 
come  to  as  much  as  £16,000,000.  If  those  who 
are  "  unrestful  "  for  the  want  of  "  a  little  more 
of  the  sort  of  thing  "  which  is  represented  by  a 
great  London  dinner  party,  comprise  only  the 
manual  workers  and  their  families,  they  will 
make  up  a  population  of  33,000,000  persons; 
so  that  the  "  little  more  of  this  sort  of  thing  " 
which  could  in  this  way  be  transferred  to  each, 
would  come  in  terms  of  money  to  95.  6d.  a  head. 
If  this  were  converted  into  specimens  of  the 
actual  delicacies  present  on  the  rich  host's  table, 
the  value  of  the  transferred  income  might 
conceivably  be  announced  as  follows  :— 

"  Whereas,  in  order  to  secure  a  better  distri- 
bution of  wealth,  His  Majesty's  Government 
will  take  over  one  half  of  the  spendable  portion 
of  every  income  which  exceeds  ,£20,000, 
arrangements  have  been  made  with  Messrs, 
Fortnum  and  Mason  whereby  every  individual 
suffering  from  Labour  Unrest  will,  three  times 
a  year,  namely  at  Christmas,  Easter  and 
Michaelmas,  be  supplied,  on  application,  with  a 
hamper  containing  portions  of  the  sort  of  things 
provided  at  rich  men's  dinners,  these  portions 
representing  the  applicant's  share  of  the  total 
sum  taken  over.  H ere  are  some  specimens  of 
the  hampers,  as  packed  for  delivery : — Hamper 
A,  containing  one  half  pint  of  Champagne, 
medium  quality,  half  of  one  fat  quail,  one  lark 
in  aspic ;  Hamper  B,  containing  nine  oysters, 
and  the  equivalent  of  one  glass  of  rum  punch 
in  a  capsule;  Hamper  C,  containing  four 


Chap.  VI.]      A  DIVISION  OF  LUXURIES  309 

oysters,  one  spoonful  of  Russian  Caviare,  two 
ounces  of  Strasburg  pie. 

"  Instead  of  such  hampers,  connoisseurs  can 
be  supplied  with  three  coupons  in  the  year,  each 
of  which  will  entitle  the  person  presenting  it  to 
one  liqueur  glass  of  French  brandy,  forty  years 
old  in  bottle. 

"  Alternatively,  by  arrangement  with  a  well- 
known  firm  of  restaurateurs,  three  dinner 
coupons  will  be  issued  to  each  applicant, 
entitling  the  holder,  once  in  every  four  months, 
to  a  three-and-sixpenny  dinner,  wine  and  coffee 
included,  together  with  after-dinner  pills  ad 
libitum,  worth  a  guinea  a  box,.  Mothers  of 
young  children  will  please  note  these  last." 

Such  results,  though  each  might  be  agreeable 
while  it  lasted,  would  hardly  suffice  to  produce 
in  some  33  million  persons  any  sense  of  a  sub- 
stantial change  in  the  existing  distribution  of 
wealth.  They  would  probably  cause  more 
unrest,  both  moral  and  intestinal,  than  they 
cured;  and  yet  the  carrying  out  of  any  one  of 
them  would  run  away  with  at  least  ^16,000,000. 

So  much,  then,  for  the  possibilities  of  pro- 
ducing a  social  millennium  by  means  of  any 
transference-taxes  which,  according  to  their  own 
principles,  radical  reformers,  not  excluding  the 
most  extreme  of  them,  could  possibly  propose 
to  inflict  on  the  conspicuously  rich,  or  even  on 
these  with  the  moderately  rich  added  to  them. 
If  greater  results  were  desired,  their  realisation 
could  not  be  even  attempted  except  by  the 
adoption  of  a  crude  and  Utopian  socialism, 


310  "  COLOSSAL    HOARDS  "          [Book  IV. 

which  is  repudiated  not  only  by  radicals,  but  by 
moderate  socialists  also.  If  such  principles 
were  adopted,  it  would  seem  at  first  sight  that 
there  was  considerably  more  to  divide.  Wealth 
would  be  cast  into  a  very  much  hotter  furnace, 
with  a  view  to  rendering  it  more  completely 
fluid ;  but  as  has  been  pointed  out  in  the  earlier 
part  of  the  present  chapter,  this  process  would 
result  in  the  defeat  of  its  own  ends;  and  most 
of  the  income  which  it  was  desired  to  pour  into 
new  moulds  would  float  away  in  vapour. 
Foreign  profits  would  go,  fancy  values  would 
go.  Savings  would  remain  unmelted,  and 
unavailable  for  any  direct  distribution.  The 
present  recipients  of  incomes  subject  to  income- 
tax  would  indeed  see  their  present  average 
income  reduced  from  £$oo  a  year  to  something 
like  ,£200;  but  the  utmost  which,  even  in 
theory,  the  masses  of  the  population  would 
gain  would  be  a  present  per  head  of  a  sixpence 
and  a  threepenny  bit  weekly :  and  half  this  or 
more  would  at  once  be  taken  away  from  them 
by  an  equalisation  of  the  present  ordinary  taxes. 
From  whatever  point  of  view  we  look  at  the 
matter,  on  whatever  principles  we  may  propose 
to  seize  a  part  or  even  the  whole  of  spendable 
income  of  the  few  for  the  purpose  of  distribut- 
ing it  among  the  many  in  such  a  way  as  to  alter 
appreciably  their  present  manner  of  living,  we 
shall  find  that  there  is  nothing,  or  nothing 
appreciable,  to  distribute.  And  the  reason  is 
simply  this,  that  the  colossal  hoard  of  the  few 
from  which  the  materials  of  distribution  are  to 


Chap.  VI.]     PRESCRIPTIONS    OF    QUACKS  311 

be  drawn — the  colossal  hoard  of  which  the 
modern  reformer  dreams,  and  on  the  supposed 
existence  of  which  his  dreams  and  his  schemes 
are  based,  is  itself  a  dream  only.  If  the 
majority  want  to  know  where  the  bulk  of  the 
national  income  is  really  hidden,  and  why  the 
plunder  of  the  minority  would  have  so  vanish- 
ing a  result,  the  answer  to  both  questions  is 
simple,  and  has  been  given  in  a  previous  chap- 
ter. Nine-tenths  of  the  spendable  income  of 
the  nation  is  in  their  own  pockets  already,  and 
all  reforms  are  illusory — they  are  the  mere 
prescriptions  of  quacks — which  have  a  contrary 
opinion  for  their  basis. 

To  say  this  is  not  to  say  that  there  are  no 
evils  to  be  reformed  :  but  a  complete  emancipa- 
tion from  the  influence  of  a  fundamentally  false 
diagnosis  of  them,  is  the  first  step  to  be  taken, 
if  we  desire  to  see  what  such  evils  really  are. 
This  observation  introduces  us  to  a  new  order 
of  questions  which  were  foreshadowed  in  our 
opening  chapter;  and  to  a  summary  considera- 
tion of  them  the  following  Book  will  be  devoted. 


BOOK   V. 
TOWARDS  A  NEW  DEPARTURE 


CHAPTER    I. 

SOCIAL  grievances  being — let  it  be  said  once 
more — partly  due  to  facts  directly  experienced, 
and  partly  to  belief  as  to  facts  which  is  operative 
through  its  effects  on  the  imagination,  griev- 
ances of  the  former  kind  are  in  their  nature 
real.     Those  of  the  latter  may  be  either  real  or 
illusory,  according  as  the  beliefs  in  which  they 
originate  are  either  correct  or  otherwise  :  and  the 
present  work  thus  far  has  been  mainly  occupied 
with  a  demonstration  that  the  principal  griev- 
ances of  to-day,  as  modern  reformers  under- 
stand them,  are  due  to  beliefs  which  are  so 
absolutely    erroneous    that   the    real    evils    or 
grievances,   so   long   as   such   beliefs   persist, 
can  be  neither  clearly  seen  nor  remedied.     It 
remains  for  us  to  consider  what  these  real  evils 
are  :  but  we  will  first  briefly  review  the  nature 
and  origin  of  the  beliefs  by  which  they  are  now 
obscured. 

These  beliefs,  in  so  far  as  they  have  been 
dealt  with  here,  are  erroneous  beliefs  as  to 
bare  material  facts — facts  relating  to  the  dis- 
tribution of  economic  wealth  :  but  their  disturb- 
ing effect  is  supplemented  by  beliefs  of  another 
kind,  which,  though  frequent  allusion  has  been 
made  to  them,  it  still  remains  for  us  to  examine. 
These  are  beliefs  relating,  not  to  specific  facts, 
such  as  the  actual  distribution  of  wealth  in  this 

315 


316  PRINCIPLES    OF    SOCIALISM        [Book  V. 

or  in  any  other  country,  but  to  certain  general 
principles  and  to  ideal  objects  of  endeavour, 
which  constitute  the  distinctive  elements  of 
definitely  articulate  socialism. 

The  principles  distinctive  of  socialism  in  all 
its  forms  are  broadly  reducible  to  three,  the 
first  of  which  has  been  gradually  superseded 
by  the  second,  whilst  both  of  them  point  to  the 
realisation  of  an  ideal  third. 

The  first  of  these  is  the  doctrine  that  all 
wealth  is  the  product  of  manual  labour. 

The  second — an  amendment  of  the  first — is 
the  doctrine  that  all  wealth  is  the  product  of 
society  as  a  whole. 

The  third  consists  of  an  ideal  object  of 
endeavour,  which  is  commonly  described  as  the 
realisation  of  "  economic  freedom." 

Let  us  take  these  principles  in  order. 

The  doctrine  that  all  wealth  is  the  product 
of  manual  labour  is  one  which  has  an  interesting 
history.  As  applied  to  communities  in  their 
earliest  childhood,  it  is  true  enough;  but  it  is 
true  as  applied  to  such  communities  only. 
Nevertheless,  if  the  civilisations  of  the  ancient 
and  mediaeval  world  be  compared  with  those  of 
to-day,  it  possesses,  as  applied  to  the  former, 
a  certain  relative  truth,  which  is  wanting  to  it 
as  applied  to  the  latter.  This  relative  truth  is 
sufficiently  illustrated  bv  the  contempt  expressed 
by  the  ruling  and  intellectual  classes  for  what 
Plato  called  :c  Work  for  gain,"  or  in  other 
words  for  wealth-production — a  contempt  which, 
except  in  the  case  of  the  republics  of  Northern 


Chap.  1.J    WEALTH  AND  MANUAL  LABOUR         317 

Italy,  survived  amongst  all  aristocracies,  whether 
of  birth  or  brain,  from  the  days  of  Plato  down  to 
those  of  our  own  grandfathers.  The  modern 
developments,  however,  of  science  and  scientific 
invention,  as  applied  to  the  processes  of  indus- 
try, through  these  to  the  processes  of  transport, 
and  through  both  to  the  processes  of  war,  have 
for  more  than  a  century  been  producing  changes 
so  colossal  as  to  show — one  might  naturally 
have  thought — to  even  the  most  casual  observer, 
that  an  aristocracy  of  intellect  had  allied  itself, 
by  means  of  capital,  with  the  democracy  of 
hand  and  muscle ;  and,  in  so  far  as  the  develop- 
ment of  wealth-production  was  in  any  sense  pro- 
gressive, had  become  the  predominant,  or,  at 
all  events  an  equal,  partner.  And  yet,  strange 
to  say,  the  very  moment  when  this  change  was 
first  generally  asserting  itself,  was  the  moment 
at  which,  by  a  curious  irony  of  fate,  the  doctrine 
that  manual  labour  is  the  sole  productive  agent, 
was  propounded  for  the  first  time  as  a  definite 
and  universal  formula :  and,  what  is  still  more 
strange,  the  promulgation  of  this  doctrine  was 
the  work,  in  the  first  instance,  not  of  the 
champions  of  labour,  but  of  the  champions  of 
capital  themselves. 

What  took  place  was  this.  In  proportion  as 
industries  became  more  elaborately  divided, 
and  different  groups  specialised  in  the  produc- 
tion of  single  classes  of  commodities,  of  which 
only  a  small  part  was  of  any  use  to  the  pro- 
ducers, the  importance  of  exchange  as  the 
means  by  which  wealth  was  finally  realised, 


$i8  RICARDO'S    DOCTRINE  [Book  V. 

became  more  and  more  evident;  and  the  main 
question  on  which  the  attention  of  economists 
was  fixed  itself,  was  the  measure  of  value  by 
which  exchange  was  regulated.  Why  do  so 
many  hymn-books  exchange  for  one  pair  of 
breeches,  or  a  watch  or  a  pair  of  spectacles  for 
so  many  mugs  of  beer?  And  the  final  answer 
of  the  economists  of  the  orthodox  or  capitalistic 
school  was  that  formulated  by  Ricardo.  Com- 
modities are  exchanged  for  one  another,  or  in 
other  words  possess  value,  in  proportion  to  the 
amount  of  wage-paid  manual  labour  which,  on 
an  average,  is  required  for  the  production  of 
them. 

Now  this  doctrine,  of  which  mention  has  been 
made  already,  is  true  enough  even  to-day  if 
qualified  by  a  variety  of  assumptions,  which 
Ricardo  and  his  school  tacitly  took  for  granted. 
They,  however,  made  no  attempt  to  specify 
them;  and  their  doctrine,  given  to  the  world  in 
all  its  crude  incompleteness,  was  converted  by 
the  genius  of  Marx  into  the  foundation  of  scien- 
tific socialism,  and  applied  to  purposes  of  which 
the  authors  of  it  never  dreamed.  If  manual 
labour,  Marx  argued,  is  the  measure  of  all  values, 
manual  labour — the  labour  which  is  now  bought 
with  wages — must,  it  is  perfectly  obvious,  be  the 
producer  of  all  wealth.  The  labourer's  wages, 
however,  represent,  as  a  matter  of  fact,  a  part 
of  the  product  only :  and  hence  the  great 
question  which  the  modern  world  must  answer 
is,  why  the  manual  labourer  does  not  receive 
the  whole?  And  the  reason,  he  said,  was  this. 


Chap.  I.]         "  MODERN    CAPITALISM '  319 

The  labourer  must,  in  order  to  produce  any- 
thing, have  not  only  raw  materials,  but  tools  or 
implements  also;  and  prior  to  the  development 
of  the  modern  capitalistic  system,  he  possessed 
such  implements  in  the  fullest  sense,  for  they 
were  his  own.  What  he  produced  he  sold ;  with 
a  part  of  the  price  received  he  paid  for  his  raw 
materials ;  and  the  remainder  was  the  full  value 
which  his  personal  labour  had  added  to  them. 
But,  so  Marx  proceeded,  the  rise  of  modern 
capitalism  has  changed  the  situation  altogether. 
The  rise  of  modern  capitalism  consists  of  a  pro- 
cess by  which,  as  the  implements  of  labour  were 
transformed  into  vast  mechanisms,  which  no  one 
labourer  could  either  possess  or  use  singly, 
these  passed  out  of  the  hands  of  the  labourers 
altogether  into  the  hands  of  a  separate  and 
wholly  non-productive  class — the  capitalists; 
and  what  this  class  has  done,  wherever  it  has 
established  itself,  has  been  as  follows.  It  vir- 
tually divided  the  country  into  a  number  of 
walled  enclosures,  within  which  the  whole  of  the 
labourer's  tools  are  stored.  Of  the  gate  of  each 
enclosure  some  capitalist  keeps  the  key.  The 
labourers  themselves  are  left  helpless  along  the 
roads  outside,  and  can  do  or  produce  nothing 
unless  the  capitalists  let  them  in.  This  the 
capitalists  do.  To  do  so  is  their  sole  business ; 
but  they  do  so  on  condition  that  each  labourer 
as  he  goes  out  shall  leave  behind  him  the  whole 
of  each  dav's  proHnct,  excent  about  one  quarter 
of  it,  without  which  he  could  not  live. 

In  other  words  what  we  call  "  modern  capi- 


320  "  ENGROSSING  OF  LOOMS  "         Book  V. 

talism "  is,  if  Marx  be  correct,  nothing  more 
than  the  triumphant  generalisation  of  a  practice 
which  was  actually  rife  in  England  in  the 
middle  of  the  sixteenth  century.  This  was  a 
practice,  inaugurated  by  "  great  clothiers  "  and 
called  "  the  engrossing  of  looms "  (which 
meant  the  acquisition  of  the  implements  of 
production  in  the  weaving  trade),  and  the  letting 
them  out  at  a  "  rent "  to  "  poor  artificers." 
Now  such  an  explanation  of  capitalism  might 
have  had  some  superficial  plausibility,  if  it 
were  not  for  the  fact,  on  which  Marx  and  his 
followers  insist  with  as  much  emphasis  as 
anybody — namely  the  fact  that,  since  the 
implements  have  passed  into  the  hands  of  the 
capitalists,  an  incomparably  greater  product  has 
resulted  from  the  labour  of  the  labourers  than 
resulted  from  it  when  the  implements  were 
their  own  personal  property.  That  the  proxi- 
mate explanation  of  this  is  the  metamorphosis 
of  the  implements  themselves  from  puny  tools 
into  vast  scientific  organisms,  was  as  obvious 
to  Marx  as  it  must  be  to  every  child ;  but  when 
we  come  to  the  farther  question  of  how  this 
metamorphosis  was  accomplished,  the  theory  of 
Marx  is  mute.  No  hint  of  an  answer  is  pro- 
vided by  it.  Marx  and  his  followers  have 
naturally  been  glib  enough  in  retorting  that  the 
metamorphosis  is  attributable  to  the  modern 
growth  of  knowledge.  But  to  say  this  is  to 
abandon  their  fundamental  theory  altogether. 
To  whatever  persons  or  conditions  the  growth 
of  knowledge  may  have  been  due,  it  has  not 


Chap.  1.]    "  WEALTH  A  SOCIAL  PRODUCT  "          321 

been  due  to  the  prosecution  of  mere  manual 
labour.  If  capitalism  were  no  more  than  a 
process  like  that  of  "  engrossing  "  handlooms, 
weaving  would  be  accomplished  by  mediaeval 
handlooms  still.  Handlooms  have  not  hatched 
themselves  into  the  power-looms  of  the  modern 
world,  because  people,  otherwise  idle,  locked 
them  up  in  yards,  and  exacted  a  toll  from  the 
weavers  who  wished  to  go  in  and  use  them. 
Wheelbarrows  have  not  hatched  themselves 
into  locomotive  engines  and  goods-trains, 
merely  because  they  ceased  to  be  the  property 
of  the  men  who  were  allowed  to  wheel  them. 
Even  socialists  themselves  have  been  gradually 
driven  to  admit  that  kinds  of  human  effort  have 
played  a  part  in  the  change — efforts  of  the 
intellect,  of  the  imagination,  and  adventurous 
mental  energy — which  are  wholly  distinct  from 
the  labour  which  is  bought  and  sold  for  wages, 
and  cannot  by  any  ingenuity  be  brought  into  the 
same  category. 

Hence,  during  recent  years,  amongst  all 
socialists  who  can  think,  the  original  doctrine 
that  the  wealth  of  the  modern  world  is  the 
product  of  one  kind  of  human  effort  only — that 
is  to  say,  of  manual  labour,  has  been  modified 
by  the  recognition  that  it  is  the  product  of  efforts 
of  many  kinds,  mental  as  well  as  manual,  no 
one  of  which  would  be  effective  without  aid 
from  the  others :  and  thus  the  doctrine  that  all 
wealth  is  a  labour-product  has  been  superseded 
by  the  doctrine  that  all  wealth  is  a  social 
product. 


322  PRODUCTIVE    EFFICIENCIES       [Book  V. 

Now  this  later  doctrine  is,  in  one  way,  a  great 
improvement  on  the  earlier;  for  whereas  the 
earlier  (at  all  events  as  applied  to  the  modern 
world)  is  a  falsehood  pure  and  simple,  the  later 
is,  in  a  certain  sense,  true.  It  is,  however, 
nothing  more  than  a  truism.  It  has  no  bearing 
whatever  on  the  practical  questions  in  connection 
with  which  it  is  ostensibly  formulated.  These 
practical  questions  relate,  not  to  the  productive 
efforts  made  by  a  society  as  a  whole,  but  to  the 
different  kinds  of  efforts  made  severally  by 
different  classes,  and  the  share  of  the  product 
which  in  consequence  is  legitimately  due  to 
one  class,  as  contrasted  or  compared  with 
that  which  is  legitimately  due  to  another. 
The  doctrine  that  wealth  as  a  whole  is  the 
product  of  society  as  a  whole  is  sufficient  if 
we  are  willing  to  content  ourselves  with  the 
only  conclusion  to  which  it  leads — namely  that 
the  product  ought  to  be  enjoyed  by  whatever 
society  may  be  in  question,  and  not  by  some 
other  society  in  a  different  quarter  of  the  globe. 
The  claims  of  classes  within  that  society  itself 
are  left  by  this  doctrine  precisely  where  they 
were. 

In  its  negative  results  it  has,  however, 
been  not  unfruitful.  It  has  relieved  thinkers, 
who  still  call  themselves  socialists,  from  the 
intolerable  necessity  of  maintaining  that  no 
human  being  is  entitled  to  receive  more  than 
another,  and  that  nobody  but  a  manual  labourer 
is  entitled  to  receive  anything-.  It  has  enabled 
them  to  bring  themselves  so  far  into  harmony 


Chap.  I.]         "  ECONOMIC   FREEDOM  •  333 

with  commonsense  as  to  admit  that  productive 
efficiencies  are  not  only  various,  but  unequal; 
and  that  considerable  inequalities  in  reward  are 
alike  just  and  inevitable.  But  in  thus  aban- 
doning one  of  the  earlier  doctrines  of  socialism, 
they  have  been  driven,  by  way  of  compensation, 
to  lay  increased  stress  on  another.  In  ceasing 
to  define  socialism  as  a  regime  of  economic 
equality,  they  have  become  more  emphatic  in 
defining  it  as  a  regime  of  economic  freedom. 

Now  it  is  difficult  to  imagine  a  phrase  more 
captivating  in  its  vague  suggestion  :  but  it  is 
difficult  to  imagine  a  phrase  which,  if  invested 
with  any  definite  meaning  and  applied  to  the 
modern  world,  is  more  like  the  shriek  of 
a  lunatic.  The  doctrine  that  no  human 
faculty  other  than  common  manual  labour  is  in- 
volved in  the  production  of  a  great  Atlantic 
liner,  or  in  the  discovery  and  extraction  of 
radium,  is  reasonable  as  compared  with  the 
conception  of  economic  freedom;  and  this 
observation  becomes  more  and  more  literally 
true  in  proportion  as  we  imagine  the  actual 
conditions  of  to-day  to  be  modified  in  accor- 
dance with  the  ideas  which  all  forms  of  socialism 
postulate.  The  nearest  conceivable  approach 
to  freedom  in  economic  work  is  that  enjoyed  by 
the  peasant  who  is  the  owner  of  the  plot  he 
cultivates.  He  is  free,  so  far  as  any  human 
laws  are  concerned,  to  cultivate  it  well  or  ill ;  but 
if  he  fails  to  cultivate  it  well,  Nature  is  a  law- 
giver who  will  chastise  him  with  cold  and  hun- 
ger :  and  if  his  plot  is  to  support  him  at  all,  he 


324  FAILINGS    OF    SOCIALISM          [Book  V 

is  not  free  to  leave  it.  Moreover  such  isolated 
work  as  the  peasant's,  which  is  free  in  the  sense 
that  it  is  exempt  from  human  dictation,  is 
precisely  the  type  of  work  which  socialism  aims 
at  abolishing.  Socialism  aims,  not  only  at  per- 
petuating, but  at  extending  and  making  univer- 
sal, those  methods  of  production  and  transport 
which  have  already  been  developed  by  capi- 
talism; and  of  these  methods  the  primary  and 
most  vital  feature  is  the  exact  correlation  of 
the  work  of  each  individual  worker  with  the 
work  of  every  other,  in  respect  of  the  commo- 
dities, or  parts  of  commodities,  fashioned — of 
their  kind,  their  number,  and  the  precise 
moments  of  their  completion;  and  of  the  kinds 
of  services  to  be  performed  (such  as  those  of 
a  pointsman  on  a  railway)  and  the  precise 
moments  of  performing  them.  If  there  is  little 
economic  freedom  for  the  industrial  employee 
to-day,  there  would  be  incomparably  less  if  all 
the  separate  businesses  that  exist  were  consoli- 
dated into  one,  by  one  single  employer — namely 
the  State,  and  if  all  the  human  wheels  were  so 
geared  together  that  any  irregularity  in  one 
communicated  itself  to  all  the  rest. 

Thus  socialism,  regarded  as  a  body  of  formu- 
lated principles  and  ideas,  which  seek  to 
accommodate  themselves  to  facts,  and  thus  to 
influence  human  desire  and  action,  is  seen,  in 
proportion  as  its  theoretical  development  pro- 
ceeds, to  move  in  a  vicious  circle.  Having 
outgrown  the  original  fallacy  that  wealth  is 
produced  by  manual  labour  solely,  uncontrolled 


Chap.  I.]  STATE    SOCIALISM  -,25 

by  any  minds  other  than  the  labourer's  own,  and 
having  endeavoured  to  reconcile  control  with 
economic  freedom  by  a  proposed  transference  of 
control  from  private  individuals  to  the  btate,  it 
ends  by  offering  labour  a  system  of  control  so 
drastic  that,  compared  with  the  conditions  of 
to-day,  it  would  not  be  freedom  but  slavery. 
To  demonstrate  this,  however,  by  appeals  to 
reason  is  one  thing.  To  liberate  the  popular 
imagination  from  the  fallacies  so  exposed  is 
another :  and  appeals  to  reason  would  accom- 
plish their  work  but  slowly  if  they  were  not 
illustrated  and  enforced  by  the  teachings  of 
actual  experience.  But  such  teachings  have 
not  been  wanting.  In  the  principle  of  State 
socialism  itself  there  is  naturally  nothing  new : 
but  there  has,  during  recent  years,  been  a 
remarkable  and  novel  extension  of  it  to  a  variety 
of  public  services,  and  one  or  two  manufactures, 
which  have  been  undertaken  and  monopolised 
in  this  country,  or  elsewhere,  by  the  State  or 
by  local  authorities  elected  on  a  democratic 
franchise;  and  attention  has  been  loudly  called 
to  these  enterprises  by  their  advocates  as 
triumphant  instalments  of  the  revolution  which 
is  ultimately  to  transform  the  world. 

How  such  undertakings  compare,  in  point  of 
efficiency,  with  others  of  the  same  kind  con- 
ducted by  private  enterprise,  Heed  not  be 
discussed  here.  The  point  here  to  be  noted  is 
that  manual  labour,  as  such,  achieves,  when  its 
employers  are  elected  public  authorities,  no 
position  which  differs  in  any  essential  v\  ay  from 


320  STRIKES  [Book  V. 

that  which  it  occupies  when  its  employers  are 
private  persons.  And  not  only  is  this  true,  but 
the  employees  of  public  authorities  all  over  the 
world  have,  during  recent  years,  been  finding 
out  that  it  is  so.  That  such  is  the  case  is  shown 
by  the  growing  number  of  strikes  directed,  not 
against  private  employers,  but  public.  In  one 
case  it  is  a  Corporation  that  is  attacked,  as  the 
public  owner  of  municipal  trams  or  gas-works. 
In  another  it  is  the  Central  Government,  as  in 
the  case  of  the  great  strikes  on  the  Western 
railway  of  France.  The  employment  of  labour 
by  such  representative  bodies  is  the  express 
image  of  socialism  in  logical  action.  The  old 
bugbear  of  private  profits  is  eliminated.  The 
question  is  reduced  to  a  question  of  "  economic 
freedom " :  and  yet  no  sooner  is  socialism 
expressed  in  action  than  labour  discovers  in  it 
the  re-embodiment  of  every  essential  feature 
against  which  socialism,  as  a  theory  and  a  hope, 
protests.  Nor  is  labour  expressing  this  dis- 
covery by  means  of  strikes  alone.  Anyone  who 
takes  the  trouble  to  examine  socialist  journals 
may  find  it  expressed  in  simple  and  undisguised 
language.  One  of  these  journals  has  published 
a  letter  from  a  correspondent  who  declares  that 
"  Under  State  socialism  life  would  be  no  better 
than  hell;  and  that  if  all  Englishmen  were  to 
be  turned  into  State  employees,  nothing  would 
be  left  for  a  self-respecting  man  but  to  emi- 
grate." Some  of  the  best-known  thinkers  who 
have  associated  themselves  with  the  socialist 
movement  have,  for  some  years  past,  been 


Chap.  I.]  SOCIALISM    EXAMINED  317 

saying  the  same  thing.  Mr.  Wells,  who  is 
perhaps  the  acutest  of  these,  insists  that  the 
very  word  "  socialism  "  is  so  impregnated  with 
fallacious  suggestion,  that  it  is  no  longer  service- 
able :  and  even  Mr.  G.  B.  Shaw,  though  the 
insight  which  he  displays  as  a  dramatist  appears 
to  desert  him  when  he  poses  as  a  social  philoso- 
pher, records  his  recognition  of  the  fact  that 
socialism,  in  so  far  as  it  means  what  for  many 
years  it  was  supposed  to  mean — that  is  to  say 
a  mere  system  of  State  capitalism — would  be 
far  more  likely  to  prove  the  consummation  of 
economic  slavery  than  a  release  from  it. 

In  spite,  however,  of  such  signs  of  the  times, 
the  word  socialism  still  stands  for  ideas,  claims 
and  tenets,  which  have  not  lost  their  influence 
over  large  numbers  of  people.  But  this  fact 
is  one  which  is  commonly  interpreted  in  a  very 
misleading  manner.  It  is  commonly  assumed 
that  everybody  who  describes  himself,  and  who 
votes,  as  a  socialist,  is  a  person  who  intelligently 
assents  to  certain  economic  doctrines — doctrines 
which  begin  with  a  theory  as  to  how  wealth  is 
produced,  and  culminate  in  some  scheme  of 
society  which  has  such  a  theory  for  its  basis. 
This  is  true  to  a  limited  extent  only.  The  main 
idea  which  is  at  the  bottom  of  popular  socialism 
is  not  any  speculative  theory  :  it  is  a  crude  idea 
as  to  facts.  It  is  the  idea  with  an  examination 
of  which  this  volume  has  been  mainly  occupied, 
that,  under  existing  conditions,  the  bulk  of  the 
world's  wealth  is  being,  to  an  increasing  extent, 
appropriated  by  a  small  minority^  that  the 


32S  SOCIALISM     A.ND    PKQPKR'l  Y        [liook  V. 

majority  of  the  population,  in  this  country  at 
all  events,  is  consequently  growing  poorer  and 
poorer;  and  that  any  theory  must  be  true  by 
which  the  majority  may  be  justified  and  united 
in  seizing  on  the  supposed  hoard,  and  leaping 
into  affluence  by  dividing  it.  A  dignitary  of 
the  English  Church,  referring  to  certain  modern 
restaurants,  which  are  renowned  alike  lor  the 
delicacy  and  the  costliness  of  the  fare  provided 
by  them,  has  expressed  his  wonder  that  the 
dinners  there  eaten  by  the  guests  do  not  turn 
every  waiter  who  hands  the  dishes  into  a 
socialist.  He  obviously  could  not  have  meant 
that  the  mere  handing  of  expensive  puddings 
converted  the  waiters  into  masters  of  some 
elaborate  economic  theory.  He  can  merely 
have  meant  that  the  sight  of  a  profuse  expendi- 
ture on  trifles  is  enough  to  generate  in  the  minds 
of  those  who  witness  it  a  belief  in  the  reality  of 
the  hoard  on  which  socialists  propose  to  seize. 
In  other  words,  he  must  have  meant  that 
primary  basis  of  socialism  is  a  belief  as  to 
simple  facts,  and  not  an  assent  to  theory. 

Given  an  acceptance  of  the  facts,  the  impor- 
tance of  the  theory  is  immense;  but  apart  from 
the  facts  supposed,  the  mere  theories  of 
socialism  would  be  negligible.  Indeed  Mr. 
Philip  Snowden,  in  a  work  to  which  reference 
has  been  made  already,  admits  that  such  is  the 
case.  The  kinds  of  property  against  which  the 
theories  of  socialism  are  directed  are,  he  says, 
not  wrong  in  themselves.  In  former  days  they 
may  have  been  essential.  They  have  come  to 


Chap,  kj    FALSE  THIiSIS  OF  RliFURMURS  329 

be  wrong  because,  under  modern  conditions, 
they  have  produced,  and  are  continuing  to 
produce,  certain  definite  and  ruinous  results, 
these  results  being,  according  to  him,  an  increas- 
ing accumulation  of  wealth  in  the  hands  of  a 
small  minority,  and  a  corresponding  increase  of 
poverty  amongst  the  great  mass  of  the  popula- 
tion ;  in  which  process,  he  contends,  we  have  the 
fundamental  fact  which  explains  nearly  all  the 
evils  characteristic  of  the  modern  world.  And 
in  this  general  thesis,  however  its  details  may 
be  modified,  all  social  reformers  of  the  present 
day  agree  with  him. 

We  are  thus  brought  back  to  the  fact,  a 
detailed  elucidation  of  which  has  been  the 
object  of  the  present  volume — the  fact  that  in 
all  its  details  this  thesis  of  the  reformers  is 
false.  In  so  far  as  it  is  merely  an  assertion 
that  social  evils  exist,  it  is  no  doubt  true,  just 
as  the  cry  of  a  man  in  the  street  that  somebody 
has  knocked  him  down  may  serve  to  call  atten- 
tion to  the  truth  that  he  has  sprained  his  ankle 
by  slipping  on  a  piece  of  orange-peel.  But 
whatever  element  of  general  truth  is  expressed 
by  it,  is  more  than  neutralised  by  the  funda- 
mental fallacy  of  its  particulars.  In  calling 
attention  to  the  fact  that  real  grievances  exist, 
it  converts  these  into  others  which  are  chiefly 
imaginary;  and  until  the  beliefs  which  invest 
these  phantoms  with  the  semblance  of  reality 
are  dissipated,  it  is  impossible  to  determine 
with  accuracy  what  the  real  grievances  are,  what 


330  WHAT  ARE  THE  GRIEVANCES?    [Book  V. 

is  their  extent  and  origin,  or  the  methods  by 
which  they  may  be  abolished  or  mitigated. 

The  situation,  as  thus  outlined,  will  be  con- 
sidered in  the  following  chapter. 


CHAPTER    II. 

THE  idea  that  an  increasing  proportion  of  the 
income  of  the  United  Kingdom  has  for  more 
than  a  century  been,  and  is  still  being,  appro- 
priated by  a  small  and  very  wealthy  class,  is  an 
idea  so  diametrically  opposite  to  the  actual  facts 
of  the  case  that,  as  has  been  said  already,  there 
must  be  a  fact  of  some  kind,  other  than  the 
assertions  of  reformers,  to  account  for  the 
readiness  with  which  multitudes  have  accepted, 
and  are  still  accepting  it;  and  what  this  fact  is 
has  already  been  pointed  out.  Though  rela- 
tively to  the  income  enjoyed  by  the  great  mass 
of  the  population,  the  aggregate  income  of  this 
class  has  never  before  been  so  small  as  it  is  at 
the  present  time,  it  has  never  before  been  so 
large  relatively  to  the  unchanging  area  within 
the  limits  of  which  it  is  displayed  and  spent. 
It  thus  becomes  everywhere  more  and  more 
observable.  It  attracts  the  simultaneous  atten- 
tion of  a  larger  number  of  people,  who  watch 
it  growing  like  the  mango-tree  of  an  Indian 
juggler,  and  who,  though  their  own  income  has 
collectively  grown  much  faster,  are  unconscious 
of  this  growth  for  the  precise  reason  that  it  is 
general.  Hence  in  contemplating  the  rich  they 
become  the  victims  of  an  optical  delusion, 
analogous  to  that  wbi^b  is  experienced  by  a 

331 


333  EXTENSION    OF    LUXURY  [Book  V. 

railway  passenger,  when  a  train  in  which  he  is 
travelling  at  a  speed  of  forty  miles  an  hour,  is 
passed  on  parallel  rails  by  a  "  special  "  whose 
speed  is  fifty.  His  own  progress  is  unchecked, 
but  so  far  as  his  eyes  can  inform  him  he  is 
suddenly  carried  back  in  the  direction  from 
which  he  came. 

How  natural  such  a  delusion  is  can  be  very 
easily  realised  by  merely  reconsidering  the 
income  of  the  rich  to-day,  as  compared  with  the 
income  of  the  country  about  a  hundred  years 
ago.  England  was,  at  the  beginning  of  the 
nineteenth  century,  universally  admitted  to  be 
the  richest  country  of  the  world.  The  Squares 
of  London,  to  the  eyes  of  contemporary 
observers,  seemed  thronged  with  "  tumultuous 
grandeur,"  with  "  long-drawn  pomps,"  with  the 
"  freaks  of  wanton  wealth."  No  picture  of  a 
street  or  a  turnpike  road  was  perfect  without 
its  blazoned  chariots,  its  clusters  of  powdered 
footmen,  or  its  travelling-carriage  with  spruce 
postillions  and  four  galloping  horses.  The 
foreign  visitor  was  amazed,  the  home-grown 
critic  was  scandalized,  not  only  by  the  glitter, 
but  also  the  wide  extension  of  luxury  :  and  yet, 
of  the  country  by  which  such  impressions  were 
produced,  the  entire  income  was  at  that  time 
considerably  less  than  the  aggregate  of  incomes 
in  excess  of  ,£1,000  a  year  to-day.  As  com- 
pared with  the  computations  of  agitators,  this 
latter  sum  is  infinitesimal.  As  compared  with 
the  present  income  of  the  nation  it  is  almost 
unbelievably  small.  It  is  not  only  a  small,  but 


Chap.  II.]       THE    "  SUPER  WEALTHY  "  333 

also  a  dwindling  quantity.  Of  the  income  of  the 
nation,  in  the  year  1801,  such  incomes  formed 
as  much  as  18  per  cent.  They  form  very  little 
more  than  12  per  cent,  of  it  to-day.  But,  in 
spite  of  its  relative  decline,  in  spite  of  its  actual 
insignificance  as  a  fraction  of  wealth  generally, 
the  aggregate  income  of  the  rich  (however  the 
rich  may  be  defined)  has  increased  in  absolute 
amount,  whilst  one  thing  has  remained  un- 
changed; and  that  is  the  size  of  the  arena  on 
whose  sands  it  displays  its  pageant. 

There  is,  therefore,  nothing  to  wonder  at  in 
the  genesis  of  a  spontaneous  impression  that 
the  increasing  wealth  of  the  nation  is  mainly 
expended  in  the  production  of  what  is  really 
one  of  its  minor,  though  perhaps  the  most 
conspicuous  of  its,  signs.  And  this  spontaneous 
impression  is  intensified  by  various  accessory 
causes.  One  of  these  is  the  systematic  teaching 
of  agitators;  but  another,  the  influence  of  which 
is  probably  even  wider,  is  the  newspaper  press 
as  a  purely  descriptive  agency.  There  are  few 
journals  in  whirh  some  prominent  column  is 
not  devoted  to  the  private  and  personal  doings 
of  Mr.  Masterman's  and  Mr.  Snowden's  friends 
—the  "enormously  rich"  or  "the  snperwealthy"; 
or  of  others  who  succeed  in  imitating  them  at 
extreme  inconvenience  to  themselves.  Many 
journals  are  devoted  to  nothing  else,  introduc- 
ing to  their  readers,  with  an  air  of  pntronizing 
reverence,  a  select  assortment  of  millionaires 
and  duchesses,  whose  furs,  whose  fcnthers, 
and  whose  food  the  readers  are  invited  to  copy, 


334  SOCIAL    UNREST  [Book  V. 

at  a  cost  tar  exceeding  the  incomes  of  nine 
out  of  every  ten  of  them,  journals  supply 
such  matter  because  the  public  demands  it : 
and  "  if  the  event  could  trammel  up  all  its 
consequences,"  both  supply  and  demand  might 
be  accepted  as  an  instance  of  life's  light  comedy. 
The  comedy,  however,  is  one  which  has  conse- 
quences graver  than  itself.  The  concentra- 
tion of  popular  thought,  which  the  newspaper 
press  stimulates,  on  the  modes  of  life  which 
exceptional  wealth  makes  possible,  tends  to 
popularise  a  false  standard  of  living.  This 
standard  is  false  because  under  no  conditions 
could  it  be  realised,  even  approximately,  by 
the  people  as  a  whole,  by  the  majority  of 
them,  or  by  more  than  one  small  section. 
Hence,  in  proportion  as  the  popular  imagination 
adopts  it,  the  people,  let  them  do  what  they 
will,  are  doomed  to  a  condition  of  disappoint- 
ment :  and  even  the  achievement  of  what  other- 
wise they  might  call  successes,  does  but  raise 
them  to  one  level  after  another,  from  which 
successively  they  contemplate  a  wider  view  of 
failure. 

Here  we  have  the  explanation  of  that  state 
of  mind,  in  so  far  as  it  is  merely  experienced 
and  not  definitely  formulated,  which  is  com- 
monly called  social  or  economic  "  unrest."  It 
is,  in  its  essence,  a  generally  diffused  desire  for 
something  which  is,  from  the  very  nature  of  the 
case,  not  generally  attainable.  It  originates  in 
a  fallacy  of  belief,  vague  and  only  half-articu- 
late, with  regard  to  existing  wealth,  its  amount, 


Chap.  II.]       GROWTH  OF  A  DELUSION  335 

and  its  present  distribution :  but  it  does  not 
assume  the  guise  of  a  specific  grievance  until 
this  vague  fallacy  is  translated  into  definite 
propositions,  which,  claiming  to  be  literally  and 
scientifically  true,  manage  to  get  rid  of  actual 
facts  altogether,  and  present  the  unattainable 
as  a  something  within  the  reach  of  all,  if  they 
will  only  vote  together  for  some  simple  means 
of  seizing  it.  The  process  of  translating  a 
popular  and  not  unnatural  delusion  into  a 
systematised  body  of  statistical  and  historical 
errors,  and  the  imposition  of  this  on  the  minds 
of  multitudes  as  the  sole  basis  of  any  true  social 
policy,  has  been  the  work  of  professional 
reformers  for  more  than  sixty  years  :  but  even 
they,  with  all  their  industry,  would  have  failed 
to  secure  for  their  fallacies  the  assent  which  has 
been  actually  accorded  to  them,  if  it  had  not 
been  for  the  original  optical  delusion  together 
with  its  emotional  consequences,  which  the 
actual  and  spectacular  reality  of  modern  wealth 
has  occasioned. 

Such  being  the  case,  it  is  impossible  to  deny 
the  force,  though  we  may  not  entirely  yield  to 
it,  of  many  of  the  arguments  which  even  men 
of  moderate  temper  urge  with  the  object  of 
exhibiting  modern  wealth  as  an  evil.  There  is 
force,  for  example,  in  the  contention  that,  unlike 
wealth  in  the  days  when  fortunes  were  acquired 
slowly,  and  the  typical  rich  man  (who  then  was 
the  great  landlord)  was  associated  from  his  birth 
onwards  with  recognised  and  important  duties, 
modern  wealth  is,  to  an  increasing  extent, 


336  PARVENU    WEALTH  [Book  V. 

typified  by  men  whose  fortunes  have  been 
acquired  in  other  countries,  and  whose  sole  idea 
of  duty,  when  they  bring  these  fortunes  to 
England,  is  to  buy  the  recognition  of  society 
by  outdoing  it  in  profuse  expenditure.  And 
when  similar  observations  are  hazarded  as  to 
fortunes  made  at  home,  it  cannot  be  denied  that 
in  some  cases  they  are  at  least  equally  plausible. 
Of  the  conspicuous  incomes  of  to-day  it  may 
be  shown  by  statistical  evidence  that  but  one 
out  of  every  five  is  two  generations  old.  As 
Goethe  said,  about  great  works  of  art,  each 
newly  enriched  person,  in  so  far  as  he  has 
entered  the  world,  "  has  had  to  create  the  taste 
by  which  alone  he  can  be  appreciated";  and 
this  taste  for  himself  is,  with  his  wife's  assist- 
ance, created  for  the  most  part  not  merely  by 
an  expenditure  of  his  wealth,  but  by  a  compe- 
titive expenditure,  the  object  of  which  is  to 
attract  attention.  In  this  way,  it  may  be  urged, 
the  standard  of  mere  material  luxury  is  not  only 
raised  and  vulgarised  amongst  those  who  are 
able  to  adopt  it,  but  is  also  obtruded  on  the 
great  mass  of  the  public  in  a  form  peculiarly 
calculated  both  to  provoke  imitation  and  to  defy 
it,  thus  corrupting  the  populnr  conception  of 
what  is  reallv  desirable  in  life,  robbing  even 
substantial  comnctence  of  its  power  to  produce 
content,  and  frequently  stimulating  an  extrava- 
gance which  reduces  it  to  actual  poverty. 

Such  contentions  a^  these  represent  one  side 
of  the  question  onlv:  hut  so  fnr  ns  thcv  o-o  t^ere 
is  a  lar^e  measure  of  truth  in  them.  For  argu- 


Chap.  II.]    AN  AVERAGE  OF  INCOMES  337 

ment's  sake  let  us  suppose  that  they  represent 
the  whole  truth.  Let  us  suppose  that,  so  far  as 
its  moral  influence  is  concerned,  the  peculiarities 
of  modern  wealth  are  absolutely  unmixed  evils  : 
but  whatever  its  evils  may  be,  these  are  not  of 
the  particular  kind  which  the  practical  and 
political  logic  of  social  reformers  imputes  to  it. 
Its  existence  and  its  development  may  be  the 
cause  of  increasing  discontent,  but  they  cannot 
be  the  cause  of  any  actually  increasing  poverty. 
They  can  be  so,  in  the  first  place,  because  the 
mass  of  the  population  as  a  whole  grows  not 
poorer,  but  richer.  They  cannot  be  so,  in  the 
second  place,  because  the  aggregate  income  ot 
the  wealthy  represents  a  theft  (if  we  like  so  to 
express  ourselves)  which,  relatively  to  the 
income  of  the  nation,  is  a  gradually  diminishing 
quantity.  They  cannot  be  so,  in  the  third  place, 
because  the  aggregate  income  of  the  wealthy  is 
of  such  an  amount  and  character  that  no  possible 
redistribution  of  it,  whether  by  transference- 
taxes,  by  increased  wages,  or  otherwise,  would 
appreciably  alter  the  conditions  of  the  masses 
of  the  population  generally. 

The  most  drastic  redivision  conceivable  of 
the  entire  present  income  of  this  country — 
namely  a  redivision  in  accordance  with  the 
principles  of  the  crudest  socialism — would,  as 
hn^  been  shown  already,  yield  an  income  of 
£^  per  inhabitant,  as  against  .^34,  which  is, 
und-T  existing  conditions,  the  average  per  head 
of  the  classes  not  <^]biect  to  incomp-tax:  and 
the  increase  would  he  more  than  neutralised  by 


338  AVERAGE    NET    INCOME  [Book  V. 

the  equalisation  of  taxes,  rates  and  savings.1 
The  average  net  income  per  family  of  five 
persons,  in  which  such  a  redivision  would  result, 
would  be  theoretically  about  ^130.  The 
average  net  income  per  family  of  the  classes  not 
subject  to  income-tax  is,  at  the  present  time, 
about  ^150. 

Such  an  absolute  equalisation,  it  is  true,  is 
not  generally  advocated  even  by  the  extremest 
of  practical  politicians;  but  a  consideration  of 
its  theoretical  results  is  valuable  as  providing 
us  with  the  only  rational  standard  by  which  the 
incomes  prevalent  in  any  class  can  be  measured. 
Thus  a  class  in  which  family  incomes  average  a 
few  hundreds  a  year  cannot,  under  existing 
conditions,  reasonably  regard  itself  as  poor  in 
proportion  as  these  incomes  fall  short  of  ,£5,000 
or  even  of  £"1,000.  A  class  in  which  family 
incomes  average  .£150,  and  individual  earnings 
range  from  ^50  to  £7$,  cannot  reasonably 
regard  itself  as  aggrieved  because  these  incomes 
fall  short  of  ,£160  and  ^100.  Such  incomes 

I.  The  present  average  per  head  of  the  population,  in 
respect  of  taxes,  rates,  and  savings,  is  about  £10  per  head 
or  ^50  per  family  of  five  persons.  The  present  average 
for  the  classes  not  subject  to  income-tax  is  about  £4  per 
head,  or  £20  per  family.  The  average  gross  income  per 
family  is  £170.  The  average  for  all  families,  were  all 
fortunes  equalised  on  extreme  socialistic  principles,  would 
be  £180.  Present  taxes,  etc.,  being  deducted  from  the 
first,  leave  an  average  net  income  of  ^150.  Equalised 
taxes,  etc.,  being  deducted  from  the  second,  would  leave 
an  average  net  income  of  ^130 


Chap.  II.]     IDEAS  OF  REDISTRIBUTION  339 

should  rather  be  regarded  as  the  first  beginnings 
of  riches;  for  they  all  of  them  raise  their  reci- 
pients, to  a  very  appreciable  degree,  above  the 
condition  which  in  any  case  must  be  that  of  the 
vast  majority.  A  man  in  any  class  who  is  per- 
suaded that  his  case  is  exceptional,  may  logically 
maintain  that  he  has  a  grievance,  because  his 
income,  however  large,  is  small  as  compared 
with  that  to  which  his  special  merits  entitle  him  : 
but  if  grievances  mean  conditions  which  political 
reforms  can  remedy,  it  cannot  be  an  actual 
grievance,  in  the  case  of  the  masses  of  the 
population,  that  their  incomes  fail  to  reach  or 
exceed  any  sum  but  the  maximum  which  any 
scheme  of  division  could  in  practice  secure  for 
everybody.  Such  being  the  case,  what  we  have 
seen  is  this — that,  whatever  may  be  the  scheme 
of  division  which  social  reformers  advocate,  no 
such  scheme,  even  in  theory,  could  produce  the 
kind  of  result  which  reformers  present  as  prac- 
ticable to  the  imagination  of  multitudes — that 
is  to  say,  the  generalisation  of  any  condition 
which  would  even  remotely  approach  what  is 
meant  by  "riches,"  as  the  word  is  used  to-day. 
No  such  result  could  be  produced  by  any  scheme 
of  division,  for  the  simple  reason  that  there  is 
not  enough  to  divide  :  and  all  programmes  of 
reform  which  have  any  such  scheme  as  their 
basis  are  directed,  not  against  the  present 
distribution  of  such  wealth  as  exists,  but  against 
the  present  limitations  of  the  productive  facul- 
ties of  mankind. 

And  here  it  may  be  noted  with  interest  that  a 


340  ERRORS  OF  DISTRIBUTION         [Book  V. 

statistician  who  was  originally  known  as  an 
emphatic  exponent  of  the  view  precisely  oppo- 
site— who  aimed  at  exhibiting  poverty  as  purely 
the  result  of  concentrated  wealth — has  subse- 
quently modified  this  view,  at  all  events  so 
far  as  to  recognise  that,  let  existing  wealth 
be  distributed  in  whatever  manner  we  please^ 
the  mass  of  the  population  would  compara- 
tively be  poor  still.  Substantially,  if  not 
in  detail,  his  conclusion  accords  with  that 
which  has  been  elucidated  in  the  present 
work,  that  the  limitations  of  wealth  now  im- 
posed on  the  great  majority  of  mankind, 
however  they  may  be  aggravated  by  what  he 
calls  "  errors  of  distribution,"  are  determined 
in  the  last  resort  by  the  limitations  of  the  total 
product.  Nor  does  his  agreement,  however 
qualified  and  partial,  with  the  argument  of  the 
present  wrork,  end  here.  From  the  above 
admission  he  advances  to  the  practical  conclu- 
sion that  if,  not  satisfied  with  such  crumbs  as 
might  come  to  them  from  the  ruin  of  the  rich, 
the  poorer  classes  in  any  substantial  sense  want 
more,  means  must  be  discovered  by  which  the 
energies  of  the  nation  may  produce  more.  And 
other  reformers  have  of  late  been  coming  to  the 
same  conclusion.  Here  at  all  events  we  have 
a  principle  which  is  fundamentally  true,  super- 
seding or  modifying  one  which  is  altogether 
fallacious.  But  even  this  principle,  when 
reformers  translate  it  into  practical  language, 
is  so  distorted  by  visionary,  or  definitely  polemi- 
cal exaggerations,  that,  even  were  it  wholly 


Chap.  II.]      ERRORS  OF  DISTRIBUTION  341 

untrue,  it  could  hardly  be  more  misleading ;  and 
before  we  proceed  to  consider  its  real  signifi- 
cance, a  few  illustrations  shall  be  given  which 
will  show  what  the  general  character  of  these 
exaggerations  is. 


CHAPTER    III. 

JUST  as  the  traditional  contention  of  reformers, 
and  the  current  contention  of  most  of  them,  is 
that  the  actual  output  of  wealth,  which  already 
awaits  seizure,  is  sufficient,  if  fairly  divided,  to 
make  every  home  in  the  country  a  scene  of 
ornamental  affluence,  the  amended  contention 
with  which  we  are  now  concerned  is  that,  though 
this  result  would  be  impossible  unless  the 
actual  output  were  increased,  a  vast  and 
immediate  increase  of  it  is  not  only  possible 
but  easy.  This  general  proposition  means,  as 
interpreted  by  those  who  enunciate  it,  that  the 
economic  efficiencies  of  the  world,  and  of  this 
country  in  particular,  are  at  the  present  time 
for  the  most  part  wasted,  and  that,  were  the 
waste  checked,  the  product  would  be  forthwith 
doubled — possibly  trebled,  or  increased  to  an 
even  greater  extent.  And  when  it  is  asked  what 
the  nature  and  the  causes  of  the  waste  are,  the 
answer  is  that  the  main  causes  are  three.  One  is 
the  withdrawal  of  a  vast  amount  of  labour  and 
talent  from  the  production  and  commercial 
distribution  of  domestic  utilities  altogether,  in 
order  to  manufacture  and  manipulate  engines  of 
mere  destruction ;  another  is  a  waste  in  the 
manufacture  of  utilities  themselves,  which  is 
alleged  to  result  from  competition;  and  another 
is  the  superfluous  employment  of  multitudes  in 

342 


Chap.  III.]         COST    OF    ARMAMENTS  .543 

Selling  utilities,  who  might,  with  prodigious 
results,  be  employed  in  augmenting  the  supply 
of  them. 

Now  as  to  the  first  of  these  causes — namely 
the  employment  of  so  many  men  in  producing, 
in  using,  or  in  learning  to  use  arms,  who  might 
otherwise  be  building  houses,  or  weaving  or 
selling  stockings — the  country  no  doubt  would 
be  richer  were  there  no  necessity  for  defending 
it :  but  whether  the  cost  of  defending  it  can, 
under  existing  conditions,  be  in  any  serious 
sense  regarded  as  preventable  waste,  is  a 
question  of  politics  which  need  not  be  discussed 
here.  In  any  case  any  practicable  conversion  of 
swords  into  ploughshares,  trowels,  or  spindles, 
though  it  might  mean  an  increase  in  the  income 
available  for  private  purposes,  would  not  mean  an 
increase  of  more  than  about  ,£70,000,000 — a 
sum  which,  if  large  in  itself,  is  merely  a  small 
fraction  of  what  is  alleged  to  be  the  wasted 
total.  ^The  largest  part  of  this  is  the  waste 
which  is  attributed  to  competition,  and  an 
irrational  overgrowth  of  the  staff  which,  directly 
or  indirectly,  is  engaged  in  commercial  distribu- 
tion. 

Now  it  is  at  all  events  conceivable  that  each 
of  these  kinds  of  waste  may  be  a  reality. 
Whether  it  is  so  or  not,  and  what,  if  it  is  so, 
is  its  extent,  are  questions  which  are  entitled  to 
consideration. 

With  regard  to  the  alleged  waste  in  manu- 
factures as  resulting  from  the  practice  of 
competition,  it  is  difficult  to  see  how  such  a 


344  ALLEGED    WASTE  [Book  ¥. 

waste  could  occur  unless  various  kinds  of 
commodities,  such  as  bread,  cloth,  or  a  book, 
were  systematically  produced,  like  a  book,  in 
two  simultaneous  editions,  of  which  one  only  is 
bought  whilst  the  other  is  destroyed  as  lumber. 
Something  of  this  sort  may  occur  in  certain 
cases,  but  it  cannot  occur  to  any  very  great 
extent;  and  the  same  thing  may  be  said  with 
regard  to  the  corresponding  waste  alleged 
to  take  place  in  the  process  of  commercial 
distribution.  Such  a  waste  may  occur,  but  the 
imagination  of  enthusiasts  exaggerates  it. 
The  full  extent  of  the  exaggeration  cannot  in 
either  case  be  precisely  measured,  partly 
because  the  facts  as  they  are  cannot  be  com- 
pletely known,  and  partly  because  the  estimates 
of  the  enthusiasts  are  not  precisely  stated.  The 
magnitude  of  these  last,  however,  is  constantly 
suggested  by  illustrations,  which  are  put  forward 
as  typical,  which  are  definite  so  far  as  they  go, 
and  relate  to  facts  ascertainable  by  more  or  less 
definite  evidence. 

Of  these  illustrations  it  will  be  sufficient  to 
cite  two,  which  in  one  form  or  another  are  those 
most  often  met  with.  The  one  relates  to  the 
waste  which  is  due  to  commercial  distribution; 
the  other,  to  the  waste  which  is  due  to  the 
present  system  of  manufacture. 

Of  the  waste  in  commercial  distribution,  the 
stock  illustration  is  the  enormous  cost  of  adver- 
tisement. Mr.  Money,  in  emphasising  the 
magnitude  of  this  waste,  adduces  the  cost  of 
advertisement  as  its  chief  and  most  obvious 


Chap.  III.]    WASTE  IN  MANUFACTURE  345 

element.  It  consists  mainly,  he  says,  of  the 
cost  of  superfluous  printing;  and  he  begs  his 
readers  to  consider  how  vast  this  cost  must  be. 
Energies  which  might  be  employed  in  multiply- 
ing boots  and  biscuits  are  frittered  away  in 
persuading  people,  by  means  of  printed  matter 
in  the  columns  of  newspapers,  on  hoardings,  on 
the  backs  of  paper  parcels,  that  such  and  such 
boots  or  biscuits  are  superior  to  all  others,  or 
can  only  be  bought  at  one  particular  shop,  when 
under  different  titles  they  are  really  being  sold 
at  a  thousand,  each  shop  through  its  printers 
making  the  same  claims  for  them.  Other 
writers  have  gone  over  the  same  ground,  and 
have  declared  that  the  cost  of  advertising  in 
the  United  Kingdom  is  something  between  120 
and  150  million  pounds  a  year,  which  means  a 
loss  of  utilities  representing  the  same  value. 

The  waste  which  must  somehow  occur — it  is 
not  specified  how — in  the  process  of  manufac- 
ture itself,  is  similarly  illustrated  by  pointing  to 
the  admitted  fact  that  multitudes  are  inade- 
quately supplied  with  articles  of  necessity  such 
as  clothes,  and  comparing  this  fact  with  various 
sensational  estimates  of  the  rate  at  which 
modern  machinery  enables  these  articles  to  be 
multiplied.  Of  such  estimates,  that  which  is 
most  precise  and  popular,  relates  to  the  cotton- 
trade.  "A  single  girl,"  it  is  said,  "  can,  in  a 
single  year,  make  enough  cotton  cloth  for  the 
shirts  of  three  thousand  men.  One  hundred 
girls  could  make  shirts  for  the  whole  of  Man- 
chester. Such  being  the  case,  if  anybody  is  in 


346  PRINTING  AND  ADVERTISING      [Book  V. 

'  want  of  a  shirt,  we  may  form  some  idea  of  how 
little  manufacture  does  in  proportion  to  what 
it  might  do." 

Let  us  now  compare  each  of  these  estimates 
with  what  can  be  definitely  known  as  to  the 
facts  which  it  purports  to  represent. 

To  begin  with  the  cost  of  advertising,  which 
is  said  to  represent  a  loss  of  far  more  than  100 
million ; — if  the  cost  of  printing  is  the  main 
element  involved,  at  least  100  million  must 
be  the  cost  of  printing  alone.  Now  it  so 
happens  that,  in  respect  of  the  United  King- 
dom, we  know  with  substantial  exactitude  what 
the  annual  cost  of  printing  of  all  kinds  comes 
to;  and  of  this,  the  cost  of  advertisements  can 
form  no  more  than  a  part.  The  total  cost — 
that  of  paper  included — is  stated  in  the  Census 
of  Production;1  it  is  also  minutely  analysed; 
and  the  only  kinds  of  printing  which  can  possi- 
bly comprise  advertisements,  are  thus  made 
clearly  distinguishable.  These  consist  of  the 
printing  of  daily  and  weekly  newspapers  (trade 
journals  included),  of  magazines  of  all  kinds,  of 
"job  and  general  printing,"  and  also  of  the 
printing  of  trade  notices  on  cards,  card-paper 
boxes,  and  wrappings  used  for  parcels.  The 
cost  of  the  printing  of  all  newspapers  and 
periodicals  is  in  round  figures  ,£14,000,000;  the 
cost  of  "job  and  general  printing,"  which 
includes  that  of  posters,  is  ^13,000,000;  and 
that  of  printing  trade  notices  on  parcel-paper, 

i.  See  Final  Report  on  the  Census  of  Production  pp 
608-626. 


Chap.  III.]  "  GIRL  !N  THE  COTTON  TRADE  "      347 

cards  and  boxes,  is  not  one-third  of  a  million. 
If  we  suppose,  then,  that  as  much  as  one  half 
of  all  newspapers  and  literary  periodicals  are 
really  devoted  to  advertisements,  and  not  either 
to  news,  or  literature,  and  that  as  much  as  four- 
fifths  of  "job  and  general  printing"  is  accounted 
for  by  advertisements  of  one  kind  or  another, 
the  cost  of  printing  advertisements,  even  on 
these  excessive  assumptions,  can  hardly  amount 
to  so  much  as  ^18,000,000.  How,  then,  if,  as 
Mr.  Money  and  other  writers  suggest,  the  cost 
of  advertisements  is  mainly  the  cost  of  printing, 
can  the  total  waste  by  advertisement  be  as  much 
as  150  million,  or  even  120,  or  any  thing  remotely 
approaching  either  the  one  sum  or  the  other? 

Let  us  now  take  the  case  of  the  redoubtable 
"  girl  in  the  cotton-trade,"  whose  unaided 
exertions  in  a  year  could  make  shirting  for  three 
thousand  men.  How  is  such  an  estimate 
reached?  It  is  far  from  being  a  mere  guess, 
It  is  evidently  reached — and  arithmetically  it 
will  pass  muster — by  taking  the  total  number  of 
yards  of  cotton  cloth  produced  annually  by  all 
the  mills  of  the  country,  then  dividing  this  total 
by  the  total  number  of  operatives,  and  finally 
assuming  that  every  operative  is  a  girl.  If  four 
or  five  yards  of  cloth  be  allowed  for  every  shirt, 
the  average  output  per  "  girl  "  will,  as  thus 
computed,  have  been  given  with  sufficient 
accuracy. 

But  what  is  the  fundamental  assumption  on 
which  the  whole  of  this  computation  rests?  It 
is  the  assumption  that  the  girl  not  only  plays 


348  TRUTH    AND    ABSURDITY          [Book  V. 

her  part  in  weaving  the  cloth  in  question,  but 
has  grown  the  cotton  in  America  out  of  which  the 
cloth  is  made,  that  she  has  put  it  on  board  the 
steamer  in  which  it  is  brought  to  England,  that 
she  has  helped  to  build  the  steamer  itself,  and 
is  finally  the  sole  constructress  of  the  steam- 
driven  loom  used  by  her.  In  reality,  of  the 
cloth  which  emerges  under  the  movements  of 
her  hands,  80  per  cent.,  if  its  quantity  be 
measured  by  its  cost,  is  the  product  of  cotton- 
growers  on  the  other  side  of  the  Atlantic,  and 
of  ship-builders,  seamen  and  engineers  whom 
the  girl  has  never  even  seen.1  She  barely 
produces  one-fifth  of  what  of  the  logic  of  her 
friends  ascribe  to  her. 

Here  we  have  two  examples  of  the  manner 
in  which  polemical  visionaries,  even  when  they 
start  with  a  principle  which  is  in  itself  sound, 
that  the  basis  of  general  progress  is  increased 
efficiency  of  production,  convert  this  profound 
truth  into  a  mere  misleading  absurdity  by  their 
reckless  inflation  of  the  facts  which  they  offer 
to  the  world  as  illustrations  of  it.  The  loss  of 
productive  efficiency  by  the  waste  of  it  in  useless 
printing,  the  actual  efficiency  of  the  individual 
when  engaged  in  the  production  of  utilities,  are 
both  blown  out  by  them  to  four  or  five  times 
their  actual  magnitude  :  and  it  is  evident  from 

i.  The  cost  of  the  raw  material  relatively  to  the  value 
added  to  it  by  manufacture  is,  in  round  figures,  as  ^174 
to  £45.  Of  this  latter  sum,  about  £4  is  represented  by  the 
upkeep  cost  of  manufacturing  plant  alone.  See  Census  of 
Production,  pp.  35,  36,  339. 


Chap.  III.]  A    TEST    APPLIED  349 

the  vehemence  of  their  language  that  the  exag- 
geration of  their  general  outlook  is  considerably 
greater  than  that  which  even  their  illustrations 
register. 

We  need  not,  however,  dwell  on  such  exag- 
gerations longer.  We  shall  subject  them  to  a 
better  criticism  by  extracting  the  element  of 
truth  from  them  which  they  no  doubt  contain, 
and  seek,  with  the  aid  of  history,  to  reduce  it 
to  its  true  proportions. 

There  are  four  periods,  representable  by 
particular  years,  which  years  may  conveniently 
DC  selected  for  consideration  because  our  infor- 
mation with  regard  to  them  is  such  that  certain 
comparisons  between  them  can  be  very  easily 
made.  These  are  the  years  1801,  1850,  1880, 
and  1910.  With  regard  to  the  first  and  last  of 
them,  the  information  here  required  has  been 
set  forth  at  length  in  the  present  volume.  With 
regard  to  the  two  others,  similar  information  is 
derivable  from  the  statistical  analyses  of  Sir  R. 
Giffen,  of  Professor  Leone  Levi,  and  also  those 
of  Mr.  A.  Bowley,  by  the  latter  of  which  the 
former  have  been  slightly,  but  only  slightly, 
modified.1 

Let  us  then,  in  respect  of  each  of  these  dates 
first  consider  the  income  of  the  country  as  a 
whole,  and,  dividing  each  total  by  the  then 

1.  See  Sir  R.  Gifien's  Address  to  the  Royal  Statistical 
Society,  November,  1883  ;  Prof essor  Leone  Levi 's  Statistical 
Paper  on  "  Changes  in  the  Distribution  of  Wealth  in 
relation  to  the  income  of  the  Labouring  Classes ;  also, 
"  National  Progress  in  Wealth  and  Trade,"  by  Mr.  A. 
Bowley. 


350  GROWTH    OF    INCOMES  [Book  V 

number  of  the  population,  express  the  income  in 
terms  of  such  and  such  a  sum  per  head.  Let 
us  next  give  our  attention  to  the  working  classes 
only,  defining  these  roughly,  but  in  a  way  which 
will  serve  our  purpose,  as  all  persons,  men, 
women  and  children,  supported  on  incomes  not 
exceeding  £160  a  year;  and  let  us  express  their 
income,  in  each  case,  by  a  like  general  average. 

The  income  of  the  entire  population,  then,  in 
the  year  1801,  represented,  as  we  have  seen 
already,  an  average  of  £20  per  head. 

In  the  year  1850  it  represented  an  average  of 
,£24  a  head. 

In  the  year  1880  it  represented  an  average  of 
^35  per  head. 

In  the  year  1910  it  represented  an  average  of 
^45  per  head. 

The  income  of  the  working  classes,  in  the 
year  1801,  represented  an  income  of  ^14  per 
head. 

In  the  year  1850  it  represented  an  average  of 
per  head. 

In  the  year  1880  it  represented  an  average  of 
per  head. 

In  the  year  1910  it  represented  an  average  of 
per  head. 


Now  let  us  suppose  that  in  the  year  1801, 
when  the  working-class  income  averaged  ^14 
per  head,  and  the  national  income  as  a  whole 
averaged  £20,  some  reformer  had  foreseen  in  a 
dream  that  three  generations  later  the  working- 
class  income  would  have  risen  to  an  average  of 


Chap.  III.]          THE    ACTUAL    FACTS  351 


per  head,  and  had  incited  the  masses  to 
demand  that  this  rise  should  take  place  immedi- 
ately. It  is  obvious  that  the  realisation  of  such 
a  demand  would  have  been  impossible,  and  that 
the  "  unrest  "  caused  by  the  expectation  of  it 
would  have  been  purely  artificial  and  mis- 
chievous ;  for  if  all  the  wealth  then  existing  had 
been  equally  divided  amongst  everybody,  it 
would  have  fallen  short  by  ;£  120,000,000  of  the 
minimum  sum  by  which  these  expectations  could 
be  satisfied.  Even  if  the  prevision  of  our 
reformer  had  been  limited  to  such  conditions 
as  were  realised  in  the  year  1880,  and  he  had 
demanded  that  the  working-class  income  should 
be  at  once  raised  from  an  average  of  ^"14  per 
head  to  an  average  of  ^24,  such  a  demand  at 
the  beginning  of  the  nineteenth  century  would 
have  been  equally  impossible,  though  not  to  a 
degree  so  striking  :  for  the  sum  required  to 
satisfy  it  would  have  exceeded  the  whole  income 
of  the  country  by  something  like  ^40,000,000. 
What  has  actually  taken  place  may,  with 
substantial  accuracy,  be  understood  at  a  glance 
by  placing  the  above  figures  in  two  parallel 
lines,  thus  :  — 


Year. 

1801 
1850 
1880 
1910 


National  incomes 
expressed  as 
average  ir  comes 
per  head  of  the 
entire  population. 

/2O 

Working-class 
incomes   expressed 
as  average  incomes 
per  head  of  persons 
supported  on  income* 
not  exceeding 
;£1CO  a  year. 

/24 

/I7 

/.« 

/24 

352  REDISTRIBUTION  [Book  V. 

These  figures  cover  three  periods,  the  first 
being  half  a  century,  and  each  of  the  last  two 
being  a  period  of  thirty  years,  or,  as  it  would 
be  commonly  called,  a  generation.  During 
each  of  these  two  last  periods  the  average 
income  per  head  of  the  working  classes  so  far 
increased  that  it  was,  at  the  end  of  each,  sub- 
stantially the  same  as  it  would  have  been  thirty 
years  before,  had  the  entire  income  of  the  nation 
been  divided  equally  amongst  everybody.  In 
the  year  1850  such  a  division  of  the  entire 
income  would  have  yielded  to  everybody  a 
share  of  ^24.  This  is  the  precise  sum  which, 
in  the  year  1880,  was  the  actual  income  per  head 
of  the  working-classes  alone.  In  the  year  1880 
a  similar  division  of  everything  would  have 
yielded  to  everybody  a  share  of  ^"35.  In  the 
year  1910  the  average  income  per  head  of  the 
working-classes  alone  fell  short  of  this  sum  by 
only  a  small  fraction.  Between  the  years  1801 
and  1850  an  analogous  change  took  place, 
though  it  was  slower  and  not  so  great.  The 
average  income  per  head  of  the  entire  popula- 
tion having  been  ^"20  in  the  former  year,  the 
average  income  per  head  of  the  working-classes 
alone  was  in  the  latter  year  £17.  At  the  end 
of  half  a  century  it  fell  short  by  only  15  per 
cent,  of  what  would  have  resulted  from  an  equal 
distribution  of  the  entire  income  at  the  begin- 
ning of  it. 

In  these  calculations  all  consideration  is 
waived  of  the  enormous  loss  which,  as  has  been 
explained  already,  would  have  accompanied 


Chap.  III.]         RESULT  OF  THE  TEST  353 

any  equal  distribution,  had  such  been  actually 
effected :  but  the  figures  above  given  are 
sufficient,  and  sufficiently  accurate,  to  illustrate 
the  broad  facts  which  alone  we  have  here  in 
view. 

The  first  of  these  is  the  fact  that  the  classes 
not  subject  to  income-tax,  who  alone,  even  in 
theory,  could  benefit  by  any  arbitrary  scheme 
of  redistribution,  enjoy  at  the  present  time  an 
average  income  per  head  which  an  equal 
division  of  the  income  of  all  classes  would  have 
been  insufficient,  even  in  theory,  to  provide  for 
them  at  any  time  earlier  than  that  of  the  death 
of  the  late  Lord  Beaconsfield  :  that  the  total, 
which  their  present  average  income  represents, 
exceeds  by  no  less  than  ^450,000,000  what 
would,  when  Lord  Beaconsfield  died,  have  been 
the  entire  income  of  the  country,  had  the  coun- 
try's productive  powers,  relatively  to  the  number 
of  its  population,  not  increased  since  the  date 
of  the  erection  of  the  Crystal  Palace;  and  that 
it  exceeds  by  no  less  than  ,£600,000,000  what 
the  income  of  the  country  at  the  time 
of  Lord  Beaconsfield's  death  would  have 
been  had  the  country's  productive  powers, 
relatively  to  the  number  of  its  popula- 
tion, not  increased  since  the  beginning  of  the 
nineteenth  century.  It  will  thus  be  seen  how 
fantastically  small  is  the  part  which  any  scheme 
of  mere  redistribution  as  such  could  have 
possibly  played  in  raising  the  level  of  wealth 
generally,  as  compared  with  what  has  actually 


554  THEORIES    OF    WASTE  [Book  V. 

been  accomplished  by  the  development  of  the 
productive  process;  and  how,  apart  from  that 
development,  no  appreciable  rise  could  have 
been  brought  about  at  all. 

On  the  other  hand,  great  though  the  increase 
of  productive  power  has  been,  the  foregoing 
survey  of  it  illustrates  its  gradual  character, 
and  warns  us  against  the  danger  of  basing 
impatient  hopes  on  vague  estimates  of  its 
latent  possibilities  of  acceleration.  There  may 
no  doubt  be  an  element  of  truth  in  the  asser- 
tions which  we  have  been  just  considering,  that 
productive  efficiency  is  wasted  to  some  appreci- 
able extent,  by  superfluous  advertising,  by 
competition  between  rival  businesses  which, 
were  they  united,  would  yield  a  larger  output, 
and  by  a  multiplication  of  middlemen,  whether 
keepers  of  shops  or  otherwise,  beyond  what  is 
requisite  for  the  convenience  of  the  public 
customer.  That  such  waste,  however,  cannot 
be  so  considerable,  that  any  sensational  results 
can  be  hoped  for  by  merely  checking  it,  is 
indicated,  not  only  by  our  examination  of  the 
instances  which  are  adduced  to  prove  its  magni- 
tude, but  also  by  the  course  of  events  from  the 
beginning  of  the  nineteenth  century  up  to  the 
present  time.  The  waste  by  the  glut  of  middle- 
men, the  waste  by  competition  in  manufacture, 
and  above  all  the  waste  by  competition  in  elabo- 
rate advertisement,  are  represented  as  being,  in 
a  marked  and  special  sense,  amongst  the  more 


Chap.  III.]      PRODUCTIVE    EFFICIENCY  355 

recent,  not  amongst  the  earlier,  developments  of 
the  modern  productive  system.  If  then,  the 
kinds  of  waste  in  question  are  really  as  great  as 
thinkers  of  a  certain  school  represent  them,  their 
cumulative  effects  will  have  been  greater  since 
the  middle  of  the  nineteenth  century  than  they 
were  during  the  earlier  half  of  it.  In  other 
words,  owing  to  a  haemorrhage  of  productive 
power,  the  income  per  head  of  the  nation  will,  to 
some  appreciable  degree,  have  increased  more 
slowly  during  the  later  period  than  it  did  during 
the  earlier.  If,  however,  we  consider  the  facts 
of  history,  we  shall  not  only  not  discover  that 
anything  of  this  kind  has  occurred.  We  shall 
discover  that  what  has  actually  occurred  has 
been  something  the  precise  reverse  of  this. 
Between  the  years  1800  and  1850  the  national 
income  increased  from  ^20  per  head  of  the 
population  to  ^24 — that  is  to  say  by  20  per 
cent.  Between  the  years  1850  and  1910,  the 
national  income  increased  from  £24  per  head 
of  the  population  to  ^45 — that  is  to  say  by  90 
per  cent.  This  means  that,  during  the  earlier 
period,  the  average  yearly  increase  per  head  of 
the  population  was  is.  /d. ;  and  that  the  average 
yearly  increase  during  the  later  period  was  75. 
It  is  therefore  plain  that  though  the  efficiency 
of  the  productive  process  may  be  somewhat 
lessened  by  a  waste,  which  the  ingenuity  of 
master  minds  may  in  course  of  time  reduce,  no 
great,  still  less  any  sudden  and  melodramatic 
developments  would  result  from  so  minor  an 
achievement  as  that  even  of  completely  check- 


356  PRODUCTIVE    EFFICIENCY         [Book  V. 

ing  it.  The  efficiency  of  the  productive  pro- 
cess— such  is  the  teaching  both  of  common 
sense  and  of  history — depends  mainly  on  two 
things — firstly,  on  the  quiet,  the  laborious,  the 
intense  concentration  of  intellect,  of  energy, 
of  practical  and  constructive  imagination,  not 
on  the  facile  feat  of  devising  remote  ideals, 
but  on  the  feat  of  wringing  from  Nature,  step 
by  difficult  step,  those  secrets  the  mastery  of 
which  converts  her  into  the  slave  of  man;  and 
it  depends  secondly  on  the  development  and 
stabilization  of  such  social  conditions  as  will 
force  these  faculties  into  action  by  providing 
them  with  their  extremest  stimulus.  Such  con- 
ditions being  given,  modern  history  teaches  us 
that  the  increased  efficiency  of  production, 
though  originating  in  the  energies  of  a  minority, 
does  as  a  fact  cause,  and  is  the  only  process 
which  can  cause,  a  continuous  increase  in  the 
product  which  distributes  itself  amongst  the 
vast  majority;  but  history  teaches  us  also  that 
this  increase  is  gradual,  and  is  continuously 
limited  by  the  fact  that  at  any  given  time  the 
actual  share  of  the  majority  falls  short  of  the 
distributable  total  by  a  fraction  so  small,  and 
in  many  respects  so  volatile,  that,  as  has  been 
shown  already,  most  of  its  substance  would,  in 
any  process  of  diffusion,  vanish. 

One  farther  illustration  of  this  fact  shall  be 
given.     The  average  of  all  incomes  up  to  ^i 60 


Cfaap.  III.]  FALSE    HOPES  357 

a  year  is  to-day,  as  we  have  seen  already,  ,£34 
per  head  of  all  the  persons  supported  on  them ; 
and  if  we  exclude  those  profits  which, 
coming  into  this  country  from  abroad,  depend 
on  foreign  and  not  upon  home  labour,  the  total 
of  all  incomes,  small  and  great,  represents  an 
average  of  ^40  per  head  of  the  entire  popula- 
tion. Now  the  average  of  all  incomes  up  to 
£160  a  year,  which  we  have  here  roughly 
described  as  the  wages  of  the  working-classes, 
was  in  the  year  1801  ^14  per  head  of  all  per- 
sons supported  on  them.  Hence,  if  the  whole 
home-produced  income  of  the  country  were 
to-day  divided  equally,  the  gain  of  the 
working-classes  would  have  been  ^26  per 
head.  A  gain  of  £26  in  no  years  means 
that  weekly  wages  have  each  year  on  an 
average  increased  at  the  rate  of  id.  per  head, 
or  about  5d.  per  family.  If  the  average 
increase  per  year  in  weekly  wage-rates  had  been 
I  Jd.  per  head,  or  as  much  as  6jd.  per  family,  the 
entire  home-produced  income  of  the  United 
Kingdom  to-day  would,  if  divided  equally, 
disappear  altogether  before  the  wage-bill  was 
fully  paid,  and  the  wage-earners  would  be 
clamouring  for  their  arrears  to  absolutely  empty 
coffers. 

Calculations  of  this  kind,  which  the  reader 
may  verify  for  himself,  will  show  how  small,  at. 
any  given  moment,  is  the  increase  in  wage- 


x 


35»  GENERAL    AVERAGES  [Book  V. 

rates,  or  in  the  average  income  per  head  of 
the  great  majority  of  the  population,  which  any 
mere  redistribution  of  incomes,  as  then  existing, 
could  produce.  They  will  also  illustrate  how 
any  general  expectations,  such  as  those  fomented 
by  reformers,  which  greatly  exceed  the  possi- 
bilities of  the  present  or  of  the  immediate  future, 
are  one  of  the  chief  curses,  as  well  as  one  of  the 
chief  characteristics,  of  the  age.  By  no  means 
the  whole,  but  by  far  the  most  conspicuous  part, 
of  what  is  called  the  "  unrest "  of  the  modern 
world  is  due  not  to  poverty,  still  less  to  an 
increase  of  poverty  ;  but  to  an  increase  of  discre- 
pancy between  expectations,  and  even  the 
remotest  possibility  of  satisfying  them.  Nor 
does  this  evil  end  with  itself.  It  distracts 
attention  from  the  nature  of  many  evils  which 
are  far  more  important  than  the  limitations  of 
mere  income,  and  which  are  far  more  amenable 
to  reform  by  political  and  Governmental  means. 
The  welfare,  however,  of  any  mass  of  human 
beings,  whether  an  entire  population  or  a  class, 
is  not  to  be  measured  solely  by  the  annual 
incomes  of  the  individuals  or  the  families 
comprised  in  it.  Still  less,  in  the  case  of  classes 
which  are  numerous,  can  it  be  measured  by 
incomes  as  stated  in  terms  of  mere  general 
averages.  For  certain  purposes  such  a  method 
of  statement  is  indispensable  :  it  is,  indeed,  in 
terms  of  general  averages  only  that  the  vital 


chap.  III.]    AND  MINUTE  PARTICULARS  339 

questions  at  issue  can  be  reduced  to  intelligible 
form;  but  for  other  purposes,  as  has  been 
pointed  out  already,  general  averages  must  be 
considered  with  reference  to  more  minute  par- 
ticulars. 

Both  these  points — the  relation  of  welfare  to 
conditions  other  than  actual  income,  and  the 
relation  of  the  actual  distribution  of  incomes  to 
certain  summary  methods  of  expressing  it, 
shall  be  now  considered  separately. 


CHAPTER    IV. 

THAT  welfare,  even  in  the  opinion  of  those 
reformers  who  are  most  vehement  in  identifying 
it  with  an  artificial  redistribution  of  incomes, 
does  not  depend  solely  on  the  absolute  amount 
of  these,  is  shown  by  certain  examples  of  it, 
so  ideal  in  their  alleged  perfection,  that 
the  destruction  of  them  is  cited  by  such 
reformers  themselves  as  representative  crimes 
of  the  modern  social  system.  Goldsmith's 
chief  indictment  against  the  "  proud  trade " 
of  his  day  was  that  it  tended  to  exterminate 
the  felicities  of  the  country  cottage.  On  this 
indictment  a  curious  commentary  will  be  found 
in  the  pictures  drawn  by  Bewick  for  an 
edition  of  "  The  Deserted  Village."  Bewick 
knew  what  in  his  day  a  country  cottage  was 
like  as  well  as  Goldsmith  himself :  and  what 
such  a  residence  was  in  its  ideal  form  these 
pictures  clearly  show,  so  exact  was  the  artist's 
drawing  of  them.  It  was  a  cabin  with  two  win- 
dows and  a  roof  which  assisted  the  chimney  in 
carrying  off  the  smoke.  A  similar  observation 
applies  to  the  houses  of  those  hill-side  High- 
landers, whose  prosperity,  destroyed  by  the  evic- 
tions of  ruthless  landlords,  is  a  favourite  topic  on 
the  platforms  of  reformers  still.  Now  if  anybody 
to-day  set  himself  to  rebuild  "  Sweet  Auburn," 
as  Goldsmith  and  as  Bewick  imagined  it,  there 
would  not  be  a  house  in  it  which  any  sanitary 

360 


Chap.  IV.]      IMPROVEMENTS  IN  HOUSING  361 

authority  would  not  condemn  as  unfit  for  human 
habitation :  and  a  new  Duke  of  Sutherland, 
who  should  provide  his  tenantry  with  replicas 
of  those  dwellings  from  which  the  occupants 
were  driven  a  hundred  years  ago,  would  be 
as  vehemently  attacked  by  reformers  for  having 
built  them  up,  as  his  predecessors  were  for  the 
crime  of  having  burnt  them  down.  In  imput- 
ing prosperity  and  happiness  to  English  and 
to  Highland  populations  whose  houses  would 
to-day  be  regarded  as  signs  of  the  extremest 
poverty,  the  reformers  may  be  quite  correct — 
perhaps  more  so  than  they  would  be  willing  to 
admit.  At  any  rate  their  argument  constitutes 
a  substantial  recognition  of  the  truth  that 
welfare  depends  not  only  on  absolute  income — 
even  on  income  as  indicated  by  the  structure  of 
the  material  home  :  and  if  we  reconsider  the 
period  dealt  with  in  the  present  volume,  and  the 
earlier  portion  of  that  period  in  particular,  we 
shall  see  how  wide  in  its  applications  this  truth 
is. 

We  have  seen  how,  since  the  beginning  of 
the  nineteenth  century,  the  income  per  head  of 
the  wage-earners  has  very  much  more  than 
doubled  itself;  but  although  this  increase  has 
been  on  the  whole  continuous,  about  80  per 
cent,  of  it  has  been  realised  during  the  last  sixty 
years,  and  only  20  per  cent,  during  the  fifty 
years  preceding.  The  comparative  slowness 
of  the  advance  made  during  this  earlier  period 
was  partly  due  to  the  cost  of  the  Napoleonic 
wars ;  partly  to  the  fact  that  the  old-fashioned 


363  IMPROVEMENTS  IN  HOUSES        [Book  V. 

race  of  craftsmen,  such  as  the  hand-loom 
weavers,  their  skill  being  reduced  in  value  by 
the  new  factory  methods,  suffered  an  actual 
loss ;  and  partly  to  the  fact  that  the  new  increase 
of  wealth  was  largely  neutralised  by  an  abnor- 
mal increase  of  the  population.  During  the 
latter  half  of  the  nineteenth  century  the  popula- 
tion of  Great  Britain  increased  by  about  78 
per  cent.  It  increased  by  as  much  as  100 
per  cent,  during  the  earlier.  In  any  case, 
between  the  years  1801  and  1850,  the  increase 
in  wage-rates,  though  far  from  inappreciable, 
was  slow;  and  it  was  moreover  obscured  by 
accompanying  events  and  conditions  which 
attracted  and  deserved  very  much  more  atten- 
tion on  the  part  of  those  who  busied  themselves 
with  the  real  well-being  of  the  people.  Fore- 
most amongst  these  were  the  squalid  and 
insanitary  houses  in  which,  round  the  new 
factories,  a  new  race  of  workers  was  congre- 
gated— houses  ran  up  with  a  haste  often  barely 
sufficient  to  meet  the  demands  of  crowds 
who  multiplied  with  a  haste  still  greater :  the 
condition  of  the  factories  themselves,  which 
were  filled  with  unfenced  machinery,  and  which 
often,  in  respect  of  their  structure,  were  not 
more  healthy  than  the  houses;  and  more  par- 
ticularly the  employment,  for  extravagant  and 
inhuman  hours,  of  armies  of  little  children,  to 
which  the  factory  system  lent  itself.  To  these 
conditions  must  be  added  the  uncertain  price  of 
corn,  which  sometimes  caused  by  falling  a 
delusive  sense  of  plenty,  and  then  caused  by 


Chap.  IV .]  SANITATION  3«>3 

rising  visitations  of  spasmodic  famine,  these 
being  signalised  by  the  recurrence,  then  familiar, 
of  bread-riots.  In  spite  of  persistent  friction 
between  political  parties,  all  these  evils  were 
attacked,  in  some  cases  by  Radicals,  who  found 
themselves  opposed  by  Conservatives,  in  some 
cases  by  Conservatives,  who  found  themselves 
opposed  by  Radicals,  in  some  by  a  spirit  of 
humanity  which  was  independent  of  faction. 
The  hours  of  labour  were  reduced ;  the  labour  of 
children  was  protected  with  peculiar  care;  the 
general  conditions  of  factory  work  were  ame- 
liorated; a  measure  was  carried  which  has 
ultimately  had  the  effect,  not  only  of  reducing 
the  average  price  of  bread,  but  also  of  saving 
the  poor  from  the  calamity  of  its  violent  fluctua- 
tions ;  and  attention  was  fruitfully  concentrated 
on  the  great  problem  of  housing. 

In  all  these  ways,  quite  apart  from  any  rise  in 
wages,  the  welfare  of  the  people  had,  at  the 
time  of  the  opening  of  the  first  Great  Exhibi- 
tion, been  notably  improved  as  compared  with 
what  it  was  before  the  battle  of  Waterloo.  The 
evils  of  inadequate,  of  insanitary,  and  of  squalid 
housing  were  those  which  had  proved  to  be 
least  easily  alterable  :  indeed  at  the  present  day 
improvement  in  this  respect  remains  one  of  the 
principal  questions  which  present  themselves  to 
the  sane  reformer.  If,  however,  we  compare 
the  conditions  which  prevail  to-day  with  those 
which  prevailed  at  the  beginning  of  the  nine- 
teenth century,  we  may  form  some  idea  of  how 
much  has  been  actually  accomplished.  It  is 


t04  SLUMS  [Book  V 

often  supposed  that  the  slum,  the  blind  alley, 
and  the  tenement  house,  with  their  swarming 
populations,  are  distinctively  and  mainly  the 
products  of  the  modern  factory  system.  This, 
however,  is  altogether  a  delusion.  It  is  true 
that  during  the  earlier  years  of  the  nineteenth 
century,  such  evils  were,  by  the  growth  of  that 
system,  aggravated  :  but  in  a  form  more  aggra- 
vated than  anything  which  prevails  to-day, 
they  were  inherited  by  the  nineteenth  century 
from  the  century  which  went  before  it.  In 
England  and  Wales  to-day,  the  average  number 
of  persons  per  house  is  5.  In  the  year  1801 
the  number  was  6^.  That  is  to  say  it  was  30 
per  cent,  greater.  The  actual  number  of  houses 
in  England  and  Wales  was  at  that  time  little 
more  than  1,400,000.  Had  houses  between 
then  and  now  increased  only  in  the  same  ratio 
as  the  population,  their  number  to-day  would 
be  5,600,000.  As  a  matter  of  fact  it  is  upwards 
of  7,000,000.  This  means  that  the  people 
to-day  have  for  their  accommodation  1,400,000 
houses  more  than  they  would  have  had,  if  since 
the  year  1801,  the  house-supply,  relatively  to 
their  number,  had  undergone  no  change.  It 
must  further  be  noted  that  the  improvement 
which  these  figures  indicate  does  not  consist  of 
an  increase  of  house-space  only.  It  includes 
improvements  in  planning,  in  sanitation,  in 
lighting,  in  water-supply,  and  in  general  struc- 
ture. It  is  true  that  these  improvements  have 
been  accompanied  by  an  increased  cost  of 
construction  :  but  experience  hn^  gradually 


Chap.  IV.]  LOCOMOTION  365 

shown  the  houses  can  be  improved  substantially 
by  an  increased  expenditure,  not  of  money,  but 
of  scientific  care.  Thus,  recent  extensions  of 
trams  and  workmen's  trains  now  make  it  possible 
for  the  wage-earner  to  be  provided  in  a  rural 
suburb  with  a  house  incomparably  better  than 
any  urban  lodgings  obtainable  for  the  same,  or 
even  for  an  appreciably  larger  rent.  Analo- 
gous observations  apply  also  to  food.  If  the 
wives  of  all  the  workmen  in  Great  Britain  and 
Ireland  could  acquire  an  aptitude  for  cookery, 
such  as  is  common  in  France,  a  change  would 
be  effected  in  the  welfare  of  many  million  house- 
holds, which  is  not  to  be  secured  by  any  mere 
rise  in  wages,  and  which  feminine  skill  might 
realise  at  an  actually  reduced  cost. 

These  examples  are  sufficient  to  illustrate  the 
fact  that,  although  income  may  be  taken  as  the 
primary  measure  of  welfare,  and  though  increase 
of  income  in  any  general  sense  can  only  be 
due  to,  and  is  always  limited  by,  an  increase  in 
the  total  product  which  existing  genius  and 
energy  enable  the  nation  to  extract  from  the 
collective  possibilities  of  the  moment,  incomes, 
their  amount  being  given,  may  be  virtually 
increased  in  a  different,  and  hardly  less  impor- 
tant, way — that  is  to  say  by  improvement  in  the 
conditions  under  which  they  are  earned,  and 
improvements  in  the  means  and  opportunities 
of  spending  them  to  the  best  advantage.  Such 
being  the  case,  the  point  which  is  here  insisted 
on,  comes  in  few  words  to  this  : — that  whilst, 
for  reasons  which  have  been  elucidated  in  this 


366  COMPARISON    OF    INCOMES        [Book  V. 

volume,  the  State  would  be  impotent  to  raise 
the  general  level  of  incomes  by  any  of  those 
political  processes  of  redivision  or  transference, 
with  which  social  reform  is  to-day  commonly 
identified,  the  conditions  under  which  given 
incomes  are  earned  and  spent,  may  by  political 
action  be  so  fruitfully  modified  that  the  effi- 
ciency of  given  incomes  as  instruments  of 
welfare  will  be  increased,  and  will  enable  the 
recipients  to  secure  for  themselves  a  more  and 
more  favourable  environment.  Such  political 
action  has,  as  the  history  of  the  last  century 
shows  us,  ameliorated  the  average  conditions 
of  private  life  in  the  past;  and  if  soberly  and 
sagaciously  continued,  to  the  exclusion  of  other 
methods,  we  may  expect  that  farther  ameliora- 
tions will  result  from  it  in  the  near  future. 

It  will,  however,  be  noted  that  the  conditions 
to  which  this  statement  is  applied,  are  qualified 
by  the  term  "average,"  the  significance  of  which 
has  been  discussed  already,  and  which  now  must 
be  considered  again,  with  renewed  reference  to 
its  implications. 

If  the  income  of  one  class  is  to  be  compared 
with  the  income  of  another,  or  the  income  of  one 
class  at  one  time  is  to  be  compared  with  the 
income  of  the  same  class  at  another  time,  the 
average  income  per  head  of  such  a  class  or 
classes,  is  a  sufficient  measure,  and  it  is  the  only 
measure  by  means  of  which  such  comparisons 
can  be  made.  It  affords,  however,  a  very  im- 
perfect index  of  the  manner  in  which  incomes 
are  distributed  within  the  limits  of  each  class 


Chap.  IV.]  THE    RESIDUUM  307 

itself.  Thus,  in  Chapter  II  of  Book  III  of  the 
present  work,  the  entire  population  supported 
on  incomes  not  exceeding  ^160  a  year  was 
taken  together,  and  the  average  income  per 
earner  was  shown  to  be  ^69.  But  such  a 
general  average  was  shown  to  cover  the  fact 
that  this  population  is  really  made  up  of  various 
groups — firstly,  a  business  group,  per  head  of 
which  the  average  income  is  ^100;  secondly, 
to  take  the  case  of  adult  males  only,  a  group 
of  skilled  wage-earners,  per  head  of  which  the 
average  income  is  ,£88;  thirdly,  of  a  group  of 
wage-earners,  commonly  called  unskilled,  of 
whom  the  average  income  per  head  does  not 
exceed  ^54,  and  the  actual  incomes  of  a  certain 
number  of  whom  can  barely  provide  them  with 
the  necessaries,  still  less  with  the  decencies,  of 
existence.  The  number  of  this  lowest  class, 
commonly  called  the  "  residuum,"  has  been 
grossly  over-estimated  by  some,  and  has  doubt- 
less been  under-estimated  by  others;  but  serious 
enquirers  agree  that,  even  if  gradually  diminish- 
ing,1 it  may  still  be  taken  to  represent  one-tenth 
part  of  the  population.  In  any  case,  whatever 
may  be  its  exact  proportion,  it  represents  a 

i.  One  sign  of  its  diminution  is  the  decrease  which  took 
place  between  the  years  1891  and  1901  in  the  number  of 
overcrowded  tenements.  The  Statistics  relating  to  this 
fact  are  clearly  summed  up  in  the  Article  on  Overcrowding 
in  the  Cambridge  edition  of  the  Encyclopaedia  Britannica. 
The  total  number  of  paupers  relieved  in  the  year  1899  was 
•.33  per  cent,  of  the  population.  In  the  year  1911  it  was 
*.i2  per  cent.  The  lowest  percentage  (2.1)  was  in  the 
jear  1901. 


368  STATIONARY    WANT  [Book  V. 

condition  sufficiently  deplorable  and  extensive 
to  demand  the  attention  of  the  prudent  states- 
man, as  well  as  to  excite  the  compassionate 
sympathies  of  the  philanthropist.  Now  this 
exceptional  class — this  "  residuum,"  this  "  sub- 
merged tenth  "  —by  no  means  monopolises  all 
the  hardships  of  poverty;  but  it  provides  the 
modern  reformer  with  the  readier  materials  of 
agitation,  and  does  most  to  invest  with  plausi- 
bility the  fatuities  of  his  proposed  remedies. 
We  will,  therefore,  before  going  further,  con- 
sider the  phenomenon  of  the  "  submerged 
tenth  "  by  itself. 

Why  a  society,  in  which  wealth  is  otherwise 
generally  increasing,  should  continue  to  preci- 
pitate a  sediment  of  almost  stationary  want,  is 
a  problem  so  complex  that  an  attempt  to  deal 
with  it  adequately  would  in  this  place  be  an 
impertinence.  But,  whatever  may  be  the  causes 
of  the  evil,  and  whatever  may  be  the  various 
methods  by  the  concurrent  adoption  of  which 
there  is  most  promise  of  remedying  it,1  there 
are  two  general  observations  which  may  be 
made  with  equal  confidence.  One  is  that  all 
the  remedies  proposed  by  reasonable  men  have 
the  common  object  of  raising  the  submerged 
by  enabling  them  to  raise  themselves — by 
bringing  them  and  keeping  them  within  the 
pale  of  normal  industry.  The  other  observa- 
tion, which  alone  need  be  here  amplified,  is 
that  the  typical  remedy  proposed  by  social 

i.  See  the  interesting  work  "Unemployment,  a  Problem 
of  Industry,"  by  Mr.  W.  H.  Beveridge,  pp.  236,  237. 


Chap.  IV.]        "  THE    BROKEN    POOR  "  369 

reformers  is  one  which  would  operate  in  a 
manner  the  precise  reverse  of  this;  that  the 
results  of  its  application  would  be  at  once  fatal 
and  ludicrous;  and  that  it  is  based  on  an 
assumption  so  childish  and  grotesque  in  its 
crudity,  that  few  of  those  who  promulgate  it  by 
direct  statement  or  innuendo  can  for  a  single 
moment  believe  seriously  that  it  is  true. 

The  most  direct  rendering  of  it  is  perhaps  that 
of  Mr.  Snowden.  "There  is  but  one  way  under 
heaven,"  he  says,  "of  making  a  poor  man  richer, 
and  that  way  is  by  making  a  rich  man  poorer." 
It  seems  to  escape  his  comprehension  that  a  way 
very  much  more  obvious  is  that  of  putting  the 
poor  man  in  the  way  of  making  something  for 
himself.  Mr.  Snowden  perhaps  may  believe 
in  his  own  principles;  but  let  us  take  this  same 
doctrine  as  preached  by  other  reformers,  who 
occupy  positions  of  greater  responsibility  than 
his.  The  destitution  of  the  "  broken  poor  "  is 
represented  by  Mr.  Masterman  as  the  peculiar 
and  inevitable  consequence  of  the  magnitude  of 
modern  "superwealth."  "  I  was  lately,"  said 
another  statesman,  "  in  the  company  of  three 
men,  each  of  whose  incomes  is  more  than  suffi- 
cient for  the  support  of  three  hundred  skilled 
workmen  at  355.  a  week."  "I,"  said  a  third 
statesman,  "could  give  you  the  name  of  a  man 
who  spent,  to  my  knowledge,  on  two  balls  and  a 
garden-party  enough  to  keep  ten  families  in 
modest  affluence  for  a  year."  Now  these  last 
two  statements  (which,  with  mere  variations  of 
detail,  are  commonplaces  on  Radical  platforms) 


370  QUESTIONS   FOR   RADICALS       [Book  V. 

may  doubtless  represent  facts;  but  the  facts 
taken  by  themselves  have  no  more  interest  or 
significance  than  the  sole  fact  which,  according 
to  Dr.  Johnson,  his  friend,  Topham  Beauclerk, 
brought  back  from  his  tour  in  Egypt,  that 
"  there  was  a  green  snake  on  the  top  of  one 
of  the  pyramids."  The  only  significance  they 
possess  lies  not  in  themselves,  but  in  the  conclu- 
sions which  those  who  dwell  no  them  intend 
obviously  that  they  shall  suggest.  These 
conclusions,  as  Mr.  Masterman  and  Mr.  Snow- 
den  blurt  out  with  very  refreshing  candour,  are 
firstly,  that — to  put  it  in  plain  language — for 
every  ,£1,000  which  any  one  man  adds  to  his 
income,  ten  men  or  more  (as  the  case  may  be) 
are  deprived  of  the  means  of  securing  any 
regular  income  whatsoever;  and  secondly,  that 
the  sole  way  of  remedying  the  extreme  destitu- 
tion experienced  by  those  who  have  nothing 
regular  to  do,  is  to  pay  them  a  handsome  salary 
for  continuing  to  do  nothing. 

Now  let  any  Radical  statesman  be  asked  the 
two  following  questions :  Firstly,  let  him  be 
asked  whether,  should  it  so  happen  that  he,  as 
the  result  of  a  perfectly  legitimate  speculation 
in  the  shares  (let  us  say)  of  some  American 
Company,  were  lucky  enough  to  increase  his 
income  to  the  extent  of  /"i,ooo,  he  seriously 
believes  that  he  would  thereby  be  adding  ten 
or  more  new  recruits  to  the  bands  of  outcasts 
who  shiver  on  the  benches  of  the  Thames 
Embankment?  He  will  answer — of  this  we 
may  be  certain — that  such  a  belief  is  nonsense — 


Chap.  IV.]    WEALTH  AND  THE  WORKLESS          371 

that  it  is  inconsistent  alike  with  common  sense 
and  with  his  own  practice,  and  with  the  ambi- 
tions and  successes  of  his  own  nearest  friends. 
So  much  being  taken  for  granted,  let  the  further 
question  be  put  to  him  of  whether  the  proposi- 
tion that  the  income  of  this  or  that  rich  man 
would,  were  it  only  divided  amongst  such  and 
such  a  number  of  poor  men,  suffice  to  keep 
them  all  in  conditions  of  modest  affluence, 
means  anything  else  than  that  so  many  thousand 
pounds  would  suffice  to  endow  the  whole  of 
them  with  the  comforts  of  year-long  idleness? 
It  must  mean  this  if  it  has  any  meaning  at  all : 
and  if  it  means  anything  practical  it  must  mean 
by  obvious  implication  that  the  true  remedy  for 
the  destitution  arising  from  want  of  work,  is 
actually  to  use,  by  some  device  or  other,  the 
rich  man's  thousands  in  the  way  thus  described 
as  possible;  and  this  again  must  mean,  if 
practice  be  translated  into  principle,  that  the 
true  remedy  for  unemployment  is  to  render 
employment  superfluous.  That  any  reformer, 
whether  Radical  or  even  extreme  Socialist, 
would  definitely  avow  this  principle  as  his  own, 
is  not  to  be  seriously  supposed.  He  could  not 
even  fail  to  admit  that  if  the  want  of  work  alone 
should  entitle  a  man  to  more  than,  or  even  as 
much  as,  he  could  earn  by  the  performance  of 
it,  want  of  work  would  become  the  most  profit- 
able of  all  professions,  and  the  cultivation  of 
incapacity  and  misfortune,  the  most  popular  of 
all  arts. 

So  far,  then,  as  poverty  in  its  more  extreme 


372  LABOUR-EXCHANGES  [Book  V. 

forms  is  concerned,  whilst  political  action  may 
assist  in  reducing  it  to  a  minimum,  such  action 
will  be  of  a  nature  entirely  opposite  to  that 
which  in  their  character  of  agitators,  the 
reformers  of  to-day  suggest.  Indeed,  to  a 
certain  extent,  the  conduct  of  such  reformers 
themselves,  when  they  act  as  statesmen,  shows 
this.  Labour-exchanges,  for  example,  the 
introduction  of  which  into  this  country  may  be 
claimed  by  a  Radical  Government  as  one  of 
its  most  honourable  achievements,  involve  no 
doubt  the  expenditure  of  public  revenue;  all 
public  revenue  is  an  abstraction  from  private 
incomes;  and  the  principal  abstraction  is  an 
abstraction  from  the  pockets  of  the  rich.  But 
such  an  abstraction  is  in  this  case,  an  incident 
not  an  object.  The  object  is  not  to  transfer 
income  from  one  class  to  another,  but  to  enable 
those  who  have  nothing  to  produce  a  substantial 
something.  Why,  then,  in  the  case  of  the 
extreme  reformers  of  to-day,  is  there  this 
discrepancy  between  the  principles  they  embody 
in  a  certain  definite  measure,  and  those  which 
they  vociferate  with  every  antic  of  conviction 
when,  in  quest  of  popular  support,  they  appeal 
to  the  imagination  of  multitudes  ?  The  reason, 
no  doubt,  consists  to  a  certain  extent  of  an 
internal  discrepancy  (honest  so  far  as  it  goes) 
between  ideas  vaguely  suggested  by  emotional 
animus  on  the  one  hand,  and  ideas  suggested 
by  common  sense  on  the  other :  but  mainly 
consists  of  the  fact  that  the  former  are  at  once 
more  simple,  and  are  calculated  to  arouse 


Cfcap.  1V.J       UNDERLYING    PROBLEMS  373 

expectations  of  a  far  more  ample  kind.  The 
unfortunate  result  is  that  reformers  whose 
policy  and  whose  power  rest  on  this  dual  basis, 
create  more  grievances  by  stimulating  novel 
and  impossible  expectations  than  they  cure,  or 
possibly  could  cure,  by  the  diminution  of  old 
hardships. 

The  foregoing  observations  are  so  far  limited 
in  their  scope  that  they  relate  specially  to  those 
forms  of  exceptional  poverty  which,  like  a  brutal 
blot,  persists  at  the  bottom  of  a  page  otherwise 
covered  with  memoranda  of  general  progress. 
But  the  maladjustments  of  existing  society,  and 
even  the  phenomena  of  poverty  itself,  are  by  no 
means  confined  to  the  limits  within  which  as  a 
spectacle,  the  latter  are  most  obtrusive.  Let 
the  artificial  grievances,  due  to  the  inflammation 
of  impossible  hopes,  to  false  conceptions  of 
things  as  they  are  and  tend  to  be,  and  to  a  trust 
in  those  projects  of  reform  (whether  Radical  or 
crudely  Socialist)  which  have  such  fallacies  as 
their  foundation — let  all  these  be  eliminated, 
and  modern  life  will  exhibit  itself  to  the  eyes  of 
sober  judgment,  partly  indeed  in  the  light  in 
which  the  Conservative  sees  it  now;  but  not  in 
that  light  alone.  Facts  and  principles  which 
Conservatism,  in  the  widest  sense  of  the  word, 
has  often  been  tempted  to  ignore,  because 
hitherto  the  expression  of  them  has  been  asso- 
ciated with  fantastic  and  malignant  error,  will 
assume  their  true  proportions,  and  exhibit  their 
true  nature.  The  elucidation  of  these — such 
is  the  author's  design — will  be  undertaken  in 


374  A   FUTURE    VOLUME  (Book  V. 

another  volume,  to  which  the  present  may  be 
regarded  as  prefatory :  but  some  indication  of 
what  these  facts  and  principles  are,  will  be  given 
in  the  following  (and  for  the  present)  our 
concluding  chapter. 


CHAPTER    V. 

CONSERVATISM,  as  a  protest  against  reform,  if 
reform  be  taken  in  the  sense  in  which,  through- 
out this  volume,  the  word  has  been  exclusively 
used,  is  not  a  protest  against  change.  It  is  a 
protest  only  against  change  in  the  organic 
structure  of  society.  So  defined,  it  stands 
for  the  rights  of  individual  property,  property 
being  taken  to  include  not  only  land  and  capital, 
but  all  the  incomes  which,  under  a  system  of 
individual  ownership,  society  does  as  a  matter 
of  fact  enable  various  individuals  to  earn  by 
the  exercise  of  their  various  capacities.  For 
Conservatism,  in  this  general  sense,  a  salary 
of  £1,000  a  year  is  property  no  less  than 
the  interest  on  1,000  one  pound  shares.  The 
organic  reformer  may  contend  that  a  man's 
right  to  the  first  may,  by  dismissal,  be  any 
day  taken  away  from  him,  whilst  his  right  to 
the  second  is  alone  in  his  own  possession,  and 
that  Conservatism  stands  for  the  conservation 
of  this  latter  kind  of  right  only,  whilst  it  leaves 
the  former  so  precarious  that  it  is  not  a  right  at 
all.  Suchanaroaiment  is  correct  if  we  consider  the 
earner  as  an  individual.  It  is  incorrect  if  we  con- 
sider him  as  a  type  of  the  earning  population 
generally.  However  secure  may  be  the  income 
from  lands  or  shares,  incomes  earned  by  effort 
are  in  the  mass  no  l^r  >rnre.  There  is,  as  a 

375 


3f6  CONSERVATISM  [Book  V. 

matter  of  fact,  an  element  of  insecurity  in  each, 
the  measure  of  which  in  one  case  is  the  total 
percentage  of  unemployment,  whilst  we  may 
take  it  to  be  in  the  other  the  annual  number  of 
bankruptcies  as  compared  with  the  number  of 
estates  annually  changing  hands  at  death.  It 
might  be  shown  by  statistical  evidence,  were  this 
the  place  to  examine  it,  that  the  chances  of  loss 
through  bankruptcy  and  the  chances  of  loss 
through  unemployment,  are  closely  connected 
and  are  very  nearly  the  same  :l  but,  apart  from 
such  details  it  is  obvious  that  without  income 
from  effort  there  would  be  no  income  from 
ownership,  and  that,  if  both  be  taken  in  the 
mass,  they  stand  and  fall  together. 

Conservatism,  then,  in  this  larger  sense — in 
which  sense  it  is  often  called  Individualism — 
represents  the  rights  of  individual  property  as 
justified  by  their  concrete  results.  It  recognises 
indeed,  that,  as  a  consequence  of  imperfections 
which  are  inseparable  from  human  nature,  these 
results  will,  from  period  to  period,  comprise 
elements  of  evil,  but  it  insists  that  such  evils 

I.  One  great  example  of  the  insecurity  of  income  de- 
rived from  ownership  is  the  decline,  since  the  year  1879, 
of  the  rent  of  agricultural  land,  amounting  to  27  per  cent. 
Income  derived  from  building-sites  has,  as  a  whole,  shown 
greater  stability  :  but  whilst  ground-rents  have  risen  in 
aome  localities,  they  have  fallen  in  others.  The  owner  ol 
houses  in  a  locality  which  is  being  gradually  deserted,  is 
Hke  an  employee  who  is  ceasing  to  be  employed.  No 
tenant  will  employ  the  land  or  buildings  of  the  one,  just 
as  no  master  will  employ  the  labour  or  the  abilities  of  tht 
other. 


Chap.  V.]       THE  RIGHTS  OF  PROPERTY  377 

would  be  intensified,  not  remedied,  by  destroy 
ing  the  roots  of  the  tree  with  a  view  to  improv- 
ing the  general  quality  of  the  fruits.  The  main 
difficulty  which  Conservatives  have  to  face  lies 
in  the  fact  that  a  variety  of  very  real  evils  have 
been  so  identified  by  extremists  with  demands 
for  impossible  remedies,  that  the  necessity 
for  opposing  and  of  exposing  the  latter  gives 
rise  to  a  diffidence  in  admitting  the  full  serious- 
ness of  the  former. 

For  example  Conservatism  is  identified,  both 
in  fact  and  in  the  popular  imagination,  with  a 
special  insistence  on  the  rights  of  property  in 
land;  and  such  rights  are  the  special  objects  of 
attack  on  the  part,  not  only  of  reformers  who 
assail  property  generally,  but  of  those  who 
regard  it,  in  any  other  form,  as  sacred.  The 
main  argument  of  such  persons  consists  of 
an  exposure  of  certain  results  which  the  prin- 
ciple of  private  property  in  land  always  renders 
possible,  and  may  any  day  render  actual.  The 
most  extreme  of  these  is  that  pictured  by  Henry 
George,  who  argued  that  this  principle,  so  long 
as  it  is  recognised  by  law,  would  enable  a  rich 
American  to  purchase  the  fee-simple  of  the 
whole  of  the  United  Kingdom,  and  gradually, 
as  leases  terminated,  to  evict  the  whole  of  the 
inhabitants.  Such  an  event  would,  he  argued, 
be  intolerable ;  and  its  mere  possibility — this 
was  George's  conclusion — constitutes  a  reduc- 
tion of  the  principle  of  private  property  in  land 
to  an  absurdity. 

Now  there   may  be   nothing  in  the   law  to 


3?8  A  MAN  AND  HIS  OWN  [Book  V. 

make  such  an  event  impossible  as  a  matter 
of  mere  theory;  for  the  law  concerns  itself, 
not  with  possibilities,  but  with  likelihoods; 
but  we  may  safely  say  that  if  such  an  event 
became  likely,  laws  would  come  into  existence 
which  would  put  it  out  of  the  question.  The 
jus  utendi  et  abutendi — the  principle  that 
it  "  is  lawful  for  a  man  to  do  as  he  wills  with 
his  own "  —would,  within  certain  limits,  be 
altogether  abolished.  This  fact  is  held  by 
reformers  generally  to  demonstrate,  at  all  events 
so  far  as  land  is  concerned,  that  the  principle  of 
private  property  is  altogether  untenable;  and 
the  crude  version  of  that  principle,  to  which 
many  Conservatives  adhere,  leaves  them,  so 
long  as  they  adhere  to  it,  defenceless  against 
the  logic  of  their  adversaries.  This  logic  itself, 
however,  owes  all  its  apparent  strength  to  the 
fact  that  those  who  make  use  of  it  do  not  push 
it  far  enough.  Even  extreme  socialists  repu- 
diate— and  they  are  perfectly  honest  in  doing 
so — the  charge  that  they  make  any  attack  on 
private  property  as  a  whole.  They  maintain 
with  the  utmost  vehemence  that  a  man's  pro- 
perty is  absolute  in  all  articles  of  personal  use, 
such  as  clothes,  furniture,  crockery,  knives  and 
forks,  pens,  ink,  and  paper :  whilst  Henry 
George,  and  all  Radicals  along  with  him,  make 
the  same  claim  for  houses,  factories,  live-stock, 
and  all  manufactured  goods.  In  respect  of 
such  things  as  these,  the  reformers  maintain 
that  the  rights  of  private  property  are  inviolable. 
Of  such  things,  however,  it  would  be  difficult  to 


Chap.  V.]     PROPERTY  UNDER  LIMITATIONS        379 

find  one,  in  respect  of  which  these  rights  are  not 
subject  to  limitations  no  less  important  than 
those  which  apply  to  the  case  of  land.  The 
most  rigid  socialist  would  admit  the  rights  of 
private  property  in  a  suit  of  clothes,  of  a  pen, 
or  of  a  pocket  knife ;  but  no  code  would  allow 
a  man  to  strip  himself  naked  in  the  street,  or 
to  use  his  pen  for  the  purpose  of  writing  libels; 
whilst  if  the  practice  of  carrying  pocket-knives 
out  of  doors  led  to  the  constant  use  of  them  in 
murderous  assaults  or  quarrels,  property-rights 
in  knives  would  be  so  far  restricted  that  they 
practically  ceased  beyond  the  limits  of  a  man's 
own  home.  Few  would  deny  that  a  man  has  a 
property  in  his  own  saliva :  and  yet  few  would 
not  wish  to  restrain  him  from  spitting  in  his 
neighbours'  faces. 

The  fact  is  that  property  of  all  kinds  is 
held  under  limitations  of  one  kind  or  another; 
and  each  kind  of  property  is  held  under 
limitations,  implied  or  legally  enacted,  which 
are  appropriate  and  peculiar  to  itself.  Indeed 
the  object  of  all  law,  is  in  the  last  resort, 
a  limitation  of  those  precise  rights,  the  exist- 
ence of  which  is  its  first  assumption,  and  the 
conservation  of  which  is  one  of  its  main  objects. 
Of  this  fact,  rights  of  property  in  land  are 
only  one  example,  and  in  many  states  of 
society  the  limits  which  the  law  must  impose 
on  these  are  far  from  the  most  important 
example  of  the  limits  it  must  impose  on  all. 
Thus  no  society  could  exist  in  which  landlords 
were  not  restrained  from  sticking1  their  pocket- 


380  TWO  MODERN   EXAMPLES         [[Look  V. 

knives  into  anybody  who  happened  to  offend 
them;  but  a  country  may  be  fairly  prosperous 
in  the  absence  of  any  laws  which  forbid  the 
sale  of  it  by  its  landowners  to  a  syndicate  of 
foreign  sportsmen. 

The  rights  of  private  property  are,  therefore, 
in  no  way  invalidated  by  the  recognition  that 
they  are  all  subject  to  some  sort  of  restriction. 
On  the  contrary,  the  surest  way  to  discredit 
them  is  to  deny  the  fact  that  in  every  case 
certain  reasonable  restrictions  are  necessary. 
But  the  principle  here  indicated  is  capable  of  a 
wider  interpretation  than  the  word  "  property  " 
in  any  of  its  usual  senses  suggests :  and  in  this 
wider  interpretation  of  it  we  shall  find  the  key 
to  the  real  problems  and  difficulties  distinctive 
of  the  modern  world,  which  by  the  extreme 
reformers  of  to-day  are  altogether  misappre- 
hended. 

Let  us  take  two  examples  of  property  in  its 
distinctively  modern  form — namely  a  railway, 
and  a  great  factory  for  the  production  of  novel 
dyes,  which  has  been  established  in  a  spot 
previously  bare  of  inhabitants,  by  the  chemical 
and  mechanical  genius  of  some  one  man. 

If  we  suppose  the  railway,  like  the  factory, 
to  be  the  first  enterprise  of  its  kind,  and  to  have 
been  likewise  constructed  and  equipped  by  the 
genius  of  one  man,  it  is  obvious  that,  before 
either  of  the  two  works  was  begun,  either  of 
these  two  men  had  the  right  to  abandon  it 
altogether,  or,  having  begun  it,  to  leave  it 
uncompleted.  Most  of  the  great  inventions  to 


Chap.  VJ.  FRUITS  OF  SUCCESS  381 

which  the  wealth  of  the  modern  world  is  due, 
have  been  realised  in  the  face  of  incredulity, 
and  often  of  actual  opposition.  Their  authors 
bave  had  originally  not  only  the  right  to 
abandon  them,  and  thus  throw  away  any  capital 
which  they  had  already  expended  in  their  incep- 
tion. They  have  often  had  to  struggle  for  so 
much  as  the  right  to  begin  them.  Such  is  the 
case  at  starting.  In  respect  of  the  property 
which  such  undertakings  represent,  the  jus 
utendi  et  abutendi  as  vested  in  the  authors  is 
unqualified.  But  when  such  undertakings — the 
railway  or  the  great  factory — is  completed  and 
in  successful  operation,  a  new  set  of  circum- 
stances gradually  or  at  once  develops  itself. 
Along  the  route  of  the  railway,  or  in  the  neigh- 
bourhood of  each  terminus,  houses  are  built 
which  would  not  have  been  built  otherwise. 
The  factory,  in  proportion  as  it  prospers,  creates 
a  town  around  it,  in  what  before  was  a  waste. 
And  if  such  enterprises  be  taken  in  their 
integrity,  they  not  only  create  houses  and 
populations  which  are  new  in  particular  places; 
they  create  a  population  which,  apart  from  them, 
could  never  have  come  into  existence.  As  soon 
as  this  result  is  accomplished,  the  position  of 
the  authors  and  owners  of  such  enterprises 
undergoes,  from  this  nature  of  the  case,  a  very 
important  change.  The  jus  utendi,  in  respect 
of  their  property,  remains  fundamentally  un- 
affected :  but  the  jus  abutendi,  in  so  far  as  this 
means  the  right  to  close  their  works,  and  allow 
them  to  go  to  ruin,  would  carry  with  it,  if 


382  EFFECTS    OF    STRIKES  [Book  V. 

exercised,  entirely  new  consequences.  A  man 
wno  had  destroyed  the  beginnings  of  a  railway, 
before  any  railways  were  in  operation,  would, 
if  the  enterprise  were  his  own,  have  merely 
destroyed  the  whole  or  a  portion  of  his  own 
property.  To  close  or  destroy  a  railway  which 
had  been  in  operation  for  years,  would  be  not 
only  for  an  owner  or  for  owners  to  abuse  their 
own  property.  It  would  be,  at  the  same  time, 
to  destroy  a  population  also.  That  the  employ- 
ing classes  will  ever  combine  as  a  whole  to 
destroy  or  permanently  close  their  railways, 
yards,  or  factories  from  which  their  entire 
revenues  are  derived  is  no  more  likely  than  the 
landlords  of  the  United  Kingdom  should  com- 
bine to  sell  its  surface  to  Henry  George's 
hypothetical  American  :  but  sporadic  examples 
of  this  exercise  of  the  jus  abutendi  are  one  of 
the  unfortunate  results  which,  with  a  growing 
frequency,  the  existing  system  of  industrial 
disputes  necessitates.  This  result  is  the  coun- 
terpart of  the  exercise  of  another  jus  abutendi — 
that  is  to  say  the  exercise  of  the  right  to  strike. 
So  far  as  individuals  are  concerned,  a  man  in  a 
free  country  has  the  right  to  abstain  from 
working,  so  long  as  he  only  surfers  by  it.  Any 
group  has  a  similar  right,  so  long  as  those  who 
suffer  are  the  members  of  that  group  alone. 
But  when  this  right  is  so  exercised  that  it  inflicts 
an  injury  on  the  great  masses  of  the  population, 
its  character  changes  in  essentially  the  same 
way  as  the  jus  abutendi  changes  in  the  case  of 
a  great  employer,  who,  if  he  should  abandon 


Chap.  V.]       THE   TRUE    CONSERVATIVE  383 

or  close  his  works  altogether,  would  not  only 
ruin  himself,  but  thousands  or  tens  of  thousands 
for  whom  he  has  made  life  possible. 

That  the  jus  abutendi^  in  respect  of  a  man's 
property  in  his  own  labour,  may  require  legal 
restriction,  is  a  conclusion  which  recent  events 
have  been  forcing  on  sober  men,  to  whose 
general  sympathies  it  may  be  unwelcome, 
but,  as  in  the  conduct  of  most  disputes,  the 
temper  of  the  disputants  is  a  factor  even  more 
important  than  their  rights,  it  is  a  counsel  of 
Conservatism,  not  a  counsel  of  revolt,  that  the 
owners  of  property  should  set  a  sober  example 
by  cultivating  a  sense  of  the  logical  and  ulti- 
mate limitations  to  which,  either  by  practice  or 
legislation,  the  rights  of  property  must  be 
submitted,  in  order  that  their  substantial  integ- 
rity may  be  maintained. 

Such  are  the  suggestions  which,  together  with 
Others  kindred  to  them,  must  be  reserved  for 
fuller  expression  in  another  volume,  in  which 
the  facts  elucidated  in  the  present  will — it  is  the 
author's  intention — be  reconsidered  in  connec- 
tion with  general  ideas  and  princinles — the  loose 
and  self-contradictorv  manner  in  which  many 
of  these  are  commonly  accepted,  and  the  sub- 
stratum of  truth  which  a  careful  analysis  may 
extract  from  them. 


INDEX. 


Abroad,  profits  .rom,  home  earnings 
in  connection  with,  82-85,  120, 
160 

See  also  Income  from  abroad. 
Advertising,  annual  cost  of,  345 
Agriculture    in    England,    fallacious 
picture   of,    drawn   by   Gold- 
smith, 18,  19 
as  a  productive  business  in  1801 

and  1910,  244,  245 
Agricultural    labourer,    earnings    of 

in  1801,  78 

alternately  alleged  to  be  starv- 
ing  and    abnormally    healthy, 
274 
Agricultural  population  in  1801,  1850 

and  1910,  246,  247 
wages,    their    increase    concur, 
rently     with     diminution     in 
number  of  labourers,  247,  250 
"question,"  234-241 
Mr.  Masterman  on,  242 
contradictions  of  reformers  with 

regard  to,  272 
meat  versus  wheat,  272 
Agricultural  upkeep,  cost  of,  155 
Apuleius,    production    for   exchange 
illustrated  in  his  Romance  of 
"The  Golden  Ass,"  28 
AnBMnents,  as  a  waste  of  productive 
power,   391 


Athenaeus,  fragment  from  Moschion, 
quoted  by  him  in  relation  to 
ancient  shipbuilding,  30 

Averages,  their  use  and  limitations, 
130,  359,  367 

Beliefs  as  to  concrete  facts,  aa  causes 
of  a  sense  of  grievance,  1,  315 
in  general  theories  and  ideals, 
as  causes  of  a  sense  of  griev- 
ance, 316 

Bewick,  his  illustrations  of  •'  Th« 
Deserted  Village,"  360 

Bread,  fluctuation  in  price  of,  363 

Carlyle,  his  delusions  as  to  the  dis- 
tribution of  wealth,  38 

Capitalism,  Karl  Marx's crud?  theory 
of,  318 

Census   of    England    and    Wales    in 

1801,  53 
professional  clases  in  1851,  103 

Census  of    Production,    manner    in 
which  the  national  income  is 
computed,   78,   113 
figures    given    in,    as    used    bj 

agitators,  255 

real  facts  underlying  them,  '258, 
260 

Child-labour  in  factories,  363 

Coal-mining,  ratio  of  profits  to 
wages  in,  265 


385 


386  INDEX 

Commerce,  ancient,  36  Fabian  Society,  its  absurd  statistic* 

Phoenician,  36  and     statements     as     to     the 

in  Stone  Age,  36  national  income,  98-110 

ancient    cargoes,     Sicilian     and  non-assessed  income,  102 

Roman,    35  incomes   subject   to    income-tax, 

Competition,    an    alleged    source   of  105 

waste,  341-350  number  and  income  of  the  "idle 

Comte,    his    theory    of    mental    de-  rich'"   10°-107 

velopment    24  total  number  of  persons  subject 

Cotton  trade,  earnings  of  men  in,  138  °3 

income  of  domestic  servants,  101 
Contradictory  estimates  by  re  formers  ^, 

factories,  improvements  in  structure 
of  grievances  and  possibilities, 

277  of>  363.  364 

Family,      "  natural,"      number      of 
Cookery,    importance    of    education  person§  comprisingj   53 

'  Families,    number    and    earnings    of 

working  class,  140-144 

Deductions  from  gross  amount,  re-          Composition    of>    according    to 
viewed    for    income-tax,    105,  Census  of  1851,  146 

106,    117-119  r,  , 

Farmers,    gross    income    of,    as    re- 

Diarwli,  his  false  estimates  of  social  viewed    by    Income-tax    Corn- 

tendencies  in  "Sybil,"  38  missioners,  104 

Distribution,       commercial,      values  "  Fancy  Values,"  284-290 

added     to    manufactures    by,  Free-trade,  its  effects  on  the  number 
125-126  of  agricultural  population,  249 

Division  of  labour  in  Phoenicia,  36 

George,  Henry,  analysis  of  his  doc- 

Ec  onomic  freedom,  idea  of,  323  trine   as  to  the   proportionate 

Socialism  the  negation  of,   329  distribution     of     wealth,     his 

E.nployees    subject    to    income-tax,  contradiction  of   the   doctrin* 

104  of   Marx,  201 

their  aggregate  income  in  1910.          absurdity  of  his  doctrine  shown 
158  by  the   facts  of  history,   201- 

Salaries  of,  Schedule  E,  in  1812,  207 

219  note  Goldsmith,      imaginary      grievance* 

Enormous  growth  of,  220  formulated  by,  16 

Engrossing  of  looms  in  the  sixteenth  Goods,    amount    of    national    incom* 
century,   320  represented  by,  125,   126 


INDEX 


387 


Goods — 

imported  from  abroad,  126 
total  income  represented  by,  and 

the  commercial  distribution  of 

them,   159 
Grievances,  as  due  to  experience,  or 

to  beliefs,  8 

Hegel,  his  influence  on  Marx,  23 
Hoard  of  the  rich — quarrels  amongst 
reformers  as   to   where   it   is, 
277 

Hours     of     labour,     reduction     de- 
manded, 254 

effects     of     reduction     of,     on 

divisible  output,  257 
Houses,  of  working-classes,  in  con- 
nection with  number  of  fami- 
lies, 141 

Census  of  1911,  143-170 

number  worth  more  than  £20  a 
year,  classified  enumeration 
of,  170,  173 

houses  worth  more  than  £20  a 
year,  let  to  more  than  one 
family,  174,  175 

number  of  houses  worth  from 
£20  to  £40  a  year,  as  com- 
pared with  enumerated  assess- 
ments between  £160  and  £400 
a  year,  175,  176 

aggregate  rental  of  all  houses 
between  certain  values,  177 

ratio  of   rent  of,  to  income  of 

occupants,  178,  182 
Housing  accommodation  in  1801  and 

1910,  369 

Hyndman,    Mr.,     on     the    ratio    of 
profits  to  wages,  261 


Idle     rich — real     composition      and 

number  of,  aa  compared  with 

the   absurd    estimates   of   th« 

Fabians,  108 

Incomes  in   1801,   as  shown  by   in- 
come-tax returns,  53 
number    of,    exceeding    £160    » 

year,  £1,000  and  £5,000,  56 
number  exceeding  £60  in  1801, 

58 

general  synopsis  of,  in  1801,  55 
general    synopsis    of,    in    1910, 

56-59 
the  two  synopses   reconsidered, 

212,      213,      228       (See     al«o 

National    Income) 
pictorial     comparison     between 

incomes  in  1801  and  1910,  64 
National,  in  1801  and  1910,  78 
totals  of,  above  and  between 

certain  limits,  77 
proportion  to  total,  of  incomes 

exceeding  £5,000  in  the  years 

1801  and  1910,  79 
diminishing    amount    of    large, 

relative  to  income  of  nation, 

81 
from    abroad,    not    related    to 

wages  paid  at  home,  82,  86 
non-assessed,  total  of,   115 
subject  to  income-tax,  116 
net  amount  of,  exceeding  £160 

a  year,  123 

total  of  home  origin,  123 
gross  total  of  assessed,   confused 

by    socialists   with    net    total, 

116 


388 


INDEX 


fitcomes  in  1801. — 

represented  by  goods  and  ser- 
vices— amount  of  each,  124 

total      number     of,      separately 

earned   or   received,    123 
Income-tax,   number  of   classes   not 
subject  to,  129 

average  amounts  of  incomes  not 
subject  to,  per  head  of  re- 
cipients, 129 

average  amount  of  assessed  in- 
comes, per  head  of  recipients, 
130 

number  of  persons  subject  to, 
129 

gross  amount  reviewed  for  pur- 
puses  of,  in  1910,  152 

gross  amount  reviewed  under 
each  schedule,  153,  154 

deduction  under  each  schedule, 
154 

insufficient  allowances  for  cost 
of  upkeep,  154 

actual  cost,  as  shown  by  Census 
of  Production,  155 

•et  total  of  income  subject  to, 
in  1910,  156 

different  classifications  of  in- 
comes subject  to,  161 

incomes  subject  to,  analysis  of 
amounts  of,  according  to 
origin,  164 

number  of  persons  subject  to, 
166-183 

•numeration  of  persons  subject 
to,  in  1801,  166 

•numeration  of  persons  subject 
to,  to-day,  167 


Income  tax — 

Leone  Levi  on  the  significant* 
of  the  enumerated  incomes, 
169 

relation  of  enumerated  income! 
to  houses  of  certain  values, 
170 

Incomes  subject  to,  decline  in  aver- 
age amount  of,  since  1801,  228 
enormous  increase  of  small,  224 
Increment,  unearned,  absurd  radical 

ideas  as  to,  236,  237 
decline  during  last  fifteen  years, 

239,  240 
compared     with     increment     of 

dividends,  etc.,  238,  239 
"  Industrial   Question,"   two   aspect* 
of — a    wages    question    and    a 
profits  question,  252 

Labour,  theory  of,  as  source  of  all 

wealth,   317-321 
origin  of  theory,  319 
Labouring  classes,  increase  of  eara- 
ings  per  head  of,  223,  227,  229 
decline  in  number  of,  relatively 

to  population,  222-226 
Land  question,  different  aspect*  of, 
254 

/r,  ./,,,,..t/s  v  *\ 

Marx,   his  theory  of   economic  pro- 
duction     as      derived      from 
Hegel,  26 
contradicted  by   Henry  Georg*. 

201 

his  main  propositions  as  to  th* 
tendencies  of  society  und«r 
capitalism,  49 


INDEX 


389 


Marx- 
analysis  of   his   doctrines   as  to 

the    distribution    of    wealth, 

189-192 
fallacy    of    these    doctrines    as 

shown  by  history,  195-201 
Manufactures,  total  net  selling  value 

of  home,  160 
Masterman,    Mr.,  grotesque   picture 

drawn  by,  in  his  book  "  The 

Condition  of  England,"  50,  52 
Metal-trades,    earnings    of    men    in, 

138 
Middle  classes,   their  disappearance 

as  alleged  by  Marx,  40 
enormous   growth   of,   as   shown 

by   Leone  Levi,   also  by  the 

evidence  of  houses,  42 
growth  of,  greater  than  that  of 

any  other  class,  221,  222 
virtually    a    new    labour    class, 

225,  226 
Millinery-trades,    large    number    of 

men   earning   high    wages    in, 

129 

Minimum  wage,  See  "  Wages." 
Money,   Mr.,   his   exaggerated    esti- 
mate of  the  riches  of  the  very 

rich,  110  note 
on  waste,  345 

National  income,  per  head  of  popu- 
lation in.  1801  and  1910,  212, 
213 

as  it  would  be  to-day,  had  pro- 
ductive efficiency  not  increased 
since  1801,  214 

net  average  increment  per  head, 
215 


National  income — 

increment  of,  per  head,  how 
divided  amongst  classes,  215 

sources  of  increment — land-rent, 
buildings,  manufactures,  com- 
merce, professions,  salaries, 
217 

scheme  for  redistributing,  287 

maximum  theoretical  bonus  to 
poorer  classes,  282 

portion  from  abroad  not  avail- 
able for  Socialists,  283 

portions  "  counted  twice  over  " 
not  distributable,  284-290 

portion  saved,  not  distributable, 
290 

analysis  of  savings,  291 

interest    and    earnings    due    to 

savings,  291-293 

Optical  delusion,  caused  by  the 
spectacle  of  modem  wealth, 
90,  331 

enhanced  by  modern  newspapers, 
334 

Petronius  Arbiter,  sidelights  thrown 
by  his  novel  on  production 
for  exchange  in  the  time  of 
Nero,  32 

Population,  abnormally  rapid  growth 
between  1801  and  1850,  362 

Poverty,   extreme  range  of,  141-148 

Production     for     exchange,     falsely 
represented   by    Socialists,    as 
peculiar  to  modern  society,  23 
in  Phoenicia,  34 

its  primeval  character  as  ex 
plained  by  Herbert  Spencer. 
37 


390  INDEX 

Production,  possibilities  of  increase  "  Rich,"  the — 

of,  real  and  illusory,  341-350  false  ideas  as  to,  produced  by 

Productive  efficiency,  table  illustrat-  specifically      false      statistics, 

ing  growth  of,  352  99-110 

incomes  of  all  classes  dependent  Riches  of  the  rich  relatively  to  the 

on,  354-357  income   and    the   area   of   the 

Products,  average  value  of,  per  r/ead  country,  90,  381 

of   workers    in   manufactures,  Rousseau,    as    a    creator    of    false 

255  grievances,  14 
Professions,  income  from,  157 
Profits  from  businesses  carried  on  in 

the  United  Kingdom,   158  Savings,  annual,  amount  and  nature 

Private    firms    assessed    to    income-  of,  291 

tax,  104  of  poorer  classes,  294 

Profits   of   business,   different   ways  Servants,    the    Fabian    Society    on 

of  classifying,  162-168  incomes  of,  102 

Profits,    variations   of,    in    different  presence   and   absence  of,   their 

businesses,  262  effects  on  number  of  persons 

general  ratios  of,  to  wages,  265  per  household,  140 

as  shown  by  balance  sheets  of  a  Services,  proportion  of  the  national 

great  coal  company,  266  income  represented  by,  123-126 

as  shown  by  the  balance   sheet  analysis  of  incomes  represented 

of   a   co-operative    enterprise,  by,  161 

267  Ship,  built  by  Hiero  at  Syracuse,  its 

construction,  30 

"  Questions,"      social,      as      treated  Single -taxers,    repudiated    by    radi- 

separately,  233,  234  cals,  234-236 

Reformers,  sense  in  which  the  word  Snowden,  Mr.  P.,  his  wild  statistical 

is  used  in  this  volume,  1  misstatements,  117,  119,  123 

Rent  of  lands,  sites  of  houses,  sites  "  Social   product,"    theory  of  wealth 

of  business   premises,   and   of  as  a,  321 

buildings,  156,  157  Socialism,  State,  in  action,  326 

Residuum,  social,  368  revolt  against,  326,  327 

"  Rich,"   the,    aggregate   income    of,  its     appeal     mainly     based     on 

declining  relatively  to  national  erroneous   beliefs   as   to   fact, 

income,  86  328,  329 

false    impressions    as    to,    pro-  State  officials,  salaries  of,  161,  369 

duced    by    their    conspicuous-  "  Superwealthy "    the,    as    described 

ness,   95  by  Mr.  Masterman,  51 


INDEX  391 

Taxes,  equalization  of,  as  affecting  Wages  — 

result  of  an  equal  division  of         minimum,  as  demanded,  would 

incomes,  338  produce   general    bankruptcy, 

Theories    of    economic    production,  260 

and  theoretical  ideals,  316  increase   of,    between   1800   and 

Tin-trade,  its  importance  to  ancient  1850,  and  1850  and  1910,  '^z 

civilisation,  35  Waste  of  productive  power,  alleged, 

Tin-plate    trade,    high    earnings    of  by    armaments,     competition, 

men   in,  138  needless  advertising,  341,  350 

Trimalchio     (character     in     Roman         typical    overestimates    of,    346, 

novel),  how  he  made  his  for-  347 

tune  by  commerce,  37  Wealth  of  England  in  1800,  regarded 

at'  the    time    as    unexampled, 
332 
Upkeep   of   capital,   as  allowed    for         €ffetts  of,  as  producing  a  false 

by  Income-tax  Commisioners,  stand,  rd   of  livii-,  334 

peculiarities    of   modern,    criti- 
real  cost  of,  as  shown  in  Census  cjsmg    to    wnien    jt    is  opeQ) 

of  Production,   114-120  -35 

details  of  actual  expenditure  on,          not  in  any  divect  sense  th6  cause 
155  of  poverty,  337-371 

Welfare,   dependent   not  on   income 

Wages,  total  amount  of,  under  83s   ., 

Workers,  total  number  of  all  kinds 
a  week  (men  s),  137 

of.    men,    boys,    women    and 
not     exceeding     25s.     a     week 

girls,  127-129 
(men's  ,  137 

average   incomes  of,   per   actual 
of  women,  boys  and  girls,  aver- 

worker,  and  per  worker  with 
ages  and  totals,  133,  135,  li,c 

family,  129 
wide  difference  belween  average 

,     ,  subject    to  income-tax,    number 

efirned     by    skilled    and    un 

,  ...    ,       *  of,  and  averse  income,  129 

skuled   adult  males,   13/ 

not  subject  to  income-tax,  total 
examples    of   this    difference    iu 

income  or,  12o 
various  trades,  138.  14< 

belo'.vnng  to  thf-   Lo<"er  Middle 
minimum  demand   for.  253 

(  inss.  131 


minimum     oropoa^u     by     .strike 

tnu'.urv   into   tlieir   number  ain 
leaders,   254  T  ,,.  .  .. 

earnings     of     Lower     Middle 
grounds   of   particular   demand  C!ass       by       Committee      of 

254  Economists,  132 


A    001  374212 


